Company Reports

Core Laboratories is the premier provider of reservoir characterization services. Its foundational core analysis business has been virtually untouched over the last several decades, and the firm has done well to augment its business in line with customer preferences without straying from its niche expertise. Over the last few years, the firm has leveraged its core analysis data to develop a robust portfolio of fluids analysis services, which now represent about 65% of Core’s annual revenue. It’s also leveraged its large swaths of data to develop its Production Enhancement segment, which largely focuses on well completions in the U.S.

Following Core Laboratories’ first-quarter results, we see no reason to alter our $22 fair value estimate. First-quarter revenue of $133 million roughly exceeded our expectations by 5%, though operating income trailed our estimate by a decent margin. Nonetheless, we're positive on Core's sequential top-line results. Core typically experiences a seasonal dip in sales during the first quarter. Yet, Core overcame this dynamic despite a mostly flattish sequential result in reservoir description. This was due to disruptions to crude oil transportation from conflicts in both the Middle East and Russia-Ukraine.

Core Laboratories is the premier provider of reservoir characterization services. Its foundational core analysis business has been virtually untouched over the last several decades, and the firm has done well to augment its business in line with customer preferences without straying from its niche expertise. Over the last few years, the firm has leveraged its core analysis data to develop a robust portfolio of fluids analysis services, which now represent about 65% of Core’s annual revenue. It’s also leveraged its large swaths of data to develop its Production Enhancement segment, which largely focuses on well completions in the U.S.

Core Laboratories is the premiere provider of reservoir characterization services. Its foundational core analysis business has been virtually untouched over the last several decades, and the firm has done well to augment its business in line with customer preferences without straying from its niche expertise. Over the last few years, the firm has leveraged its core analysis data to develop a robust portfolio of fluids analysis services, which now represent about 45% of Core’s annual revenue. It’s also leveraged its large swaths of data to develop its Production Enhancement segment, which largely focuses on well completions in the U.S.

Wide-moat Core Laboratories closed out fiscal 2023 on solid footing as elevated international activity supported strong demand across product lines. Core's fourth-quarter performance came in around the midpoint of guidance in most cases, with overall flat top-line growth on an annual and sequential basis coupled with a flat to modestly reduced profitability. We'll incorporate the firm's operating and financial results shortly, but after this first look, we maintain our $28 fair value estimate.

Core Laboratories is the premiere provider of reservoir characterization services. Its foundational core analysis business has been virtually untouched over the last several decades, and the firm has done well to augment its business in line with customer preferences without straying from its niche expertise. Over the last few years, the firm has leveraged its core analysis data to develop a robust portfolio of fluids analysis services, which now represent about 45% of Core’s annual revenue. It’s also leveraged its large swaths of data to develop its Production Enhancement segment, which largely focuses on well completions in the U.S.

Wide-moat Core Laboratories delivered slightly weaker third-quarter results following a strong first half of 2023. Its production enhancement business was the main culprit, with segment revenue dropping 10% quarter over quarter as a result of lower-than-expected North American activity, exacerbated by a number of project delays from international clients that pushed product delivery to the fourth quarter. Despite these headwinds, Core maintained solid profitability, expanding the firmwide adjusted operating margin by more than 200 basis points to 13%. We don’t expect the operating environment will materially improve through year-end, and we’re lowering our fair value estimate slightly to $28 from $29 following results. At the time of writing, shares remain undervalued and trade at a more than 20% discount to our fair value estimate.

Wide-moat Core Laboratories posted decent second-quarter results as accelerating international oil and gas activity helped offset stalling activity growth in North America. We’ll incorporate the firm’s full operating and financial results shortly, but after this first look, we maintain our $29 per share fair value estimate.

Core Laboratories is the premiere provider of reservoir characterization services. Its foundational core analysis business has been virtually untouched over the last several decades, and the firm has done well to augment its business in line with customer preferences without straying from its niche expertise. Over the last few years, the firm has leveraged its core analysis data to develop a robust portfolio of fluids analysis services, which now represent about 45% of Core’s annual revenue. It’s also leveraged its large swaths of data to develop its Production Enhancement segment, which largely focuses on well completions in the U.S.

Core Laboratories’ first-quarter revenues increased 11% year over year and 1% sequentially, reflecting standard seasonal declines amidst an overall strengthening oil and gas market worldwide. The firmwide operating margin was similarly affected, expanding 500 basis points year over year while holding flat sequentially. We’ll incorporate the firm’s full financial and operating results shortly, but after this first look, we maintain our $29 fair value estimate. Our wide moat rating is unchanged following the results.

Core Laboratories is the premiere provider of reservoir characterization services. Its foundational core analysis business has been virtually untouched over the last several decades, and the firm has done well to augment its business in line with customer preferences without straying from its niche expertise. Over the last few years, the firm has leveraged its core analysis data to develop a robust portfolio of fluids analysis services, which now represent about 45% of Core’s annual revenue. It’s also leveraged its large swaths of data to develop its Production Enhancement segment, which largely focuses on well completions in the U.S.

Wide-moat Core Laboratories concluded the year on sound footing. Results for fiscal 2022 fell in line with our expectations, with total revenue increasing 4% year over year and operating margins slightly contracting to 8% from 10% in 2021. We’ll incorporate the firm’s full financial and operating results shortly, but based on our initial review, our $29 per share fair value estimate is unchanged.

After incorporating Core Laboratories’ full third-quarter financial results, we’re slightly lowering our fair value estimate to $29 (EUR 29) from $32 (EUR 31). Our wide moat rating, stable moat trend, and Morningstar Uncertainty Rating of Very High are unchanged.

Core Laboratories is the premiere provider of reservoir characterization services. Its foundational core analysis business has been virtually untouched over the last several decades, and the firm has done well to augment its business in line with customer preferences without straying from its niche expertise. Over the last few years, the firm has leveraged its core analysis data to develop a robust portfolio of fluids analysis services, which now represent about 45% of Core’s annual revenue. It’s also leveraged its large swaths of data to develop its Production Enhancement segment, which largely focuses on well completions in the U.S.

Core Laboratories posted a solid third quarter, with total revenue increasing 4% quarter over quarter and 7% year over year, slightly below the firm's second-quarter projections. About 70% of the firm's revenues are generated outside the United States, and management indicates that adverse movements in exchange rates for the euro and British pound depressed revenues by $1.5 billion. We're incorporate the firm's full financial and operating results shortly, but after this first look, we maintain our $32 (EUR 31) fair value estimate. Our wide moat rating, stable moat trend, and Morningstar Uncertainty Rating of Very High are also unchanged.

Core Laboratories is the premiere provider of reservoir characterization services. Its foundational core analysis business has been virtually untouched over the last several decades, and the firm has done well to augment its business in line with customer preferences without straying from its niche expertise. Over the last few years, the firm has leveraged its core analysis data to develop a robust portfolio of fluids analysis services, which now represent about 45% of Core’s annual revenue. It’s also leveraged its large swaths of data to develop its Production Enhancement segment, which largely focuses on well completions in the U.S.

Core Laboratories delivered solid results this quarter, posting total sequential revenue growth of 5% and a firmwide operating margin of 10%. We’re slightly lowering our fair value estimate to $32 (EUR 31) from $33 (EUR 32) following the results. Our wide moat rating and stable moat trend are unchanged.

After taking a fresh look at Core Laboratories, we’re maintaining our wide moat rating and stable moat trend while slightly lowering our fair value estimate to $33 (EUR 32) from $34 (EUR 32). The firm remains quite undervalued as recovery in global oil demand proceeds and more complicated offshore projects progress down the pipeline. About 70% of the firm’s revenue relies on international (non-U.S.) activity, where rig counts tend to recover more slowly than the North American market. Industry estimates indicate the international rig count will return to prepandemic levels around 2024, providing steady growth opportunities for Core in the near term. We estimate total revenue growth will average about 6% over the next 10 years, and we expect operating margins will expand over the same period, reaching 23.5% by 2031 (compared with 9.6% in 2021).

Core Laboratories is the premiere provider of reservoir characterization services. Its foundational core analysis business has been virtually untouched over the last several decades, and the firm has done well to augment its business in line with customer preferences without straying from its niche expertise. Over the last few years, the firm has leveraged its core analysis data to develop a robust portfolio of fluids analysis services, which now represent about 45% of Core’s annual revenue. It’s also leveraged its large swaths of data to develop its Production Enhancement segment, which largely focuses on well completions in the U.S.

We have long believed that Core Laboratories is one of the highest-quality oilfield-service companies. For one, with a wide moat rating, Core Lab possesses the strongest moat across our entire oilfield-service coverage. The company’s foundational core analysis business in the reservoir description segment, in particular, has been virtually unchallenged over the past three decades. The business passes the Warren Buffett quality test, whereby even an "idiot" could likely run the business with some profitability.