Core Laboratories N.V. (NYSE:CLB) lowered its Q4 guidance and issued weak forecast for the first quarter. The company also announced plans to cut its quarterly dividend.
The Dutch-based company said the decline in U.S. onshore activity has proven to be more pronounced than originally forecast in Core Lab's third quarter earnings release in October. The U.S. rig count quarter-to-date is down approximately 11%, with U.S. completion activity tracking downward over 20%, primarily affecting Core's Production Enhancement segment.
In addition, client discussions required to advance large international and offshore projects have progressed slower than expected. These developments have negatively impacted the fourth quarter of 2019 financial results for Core's Reservoir Description segment.
Core now projects that fourth quarter 2019 revenue will range from $154,000,000 to $156,000,000, with operating income of approximately $24,000,000 to $25,000,000, yielding operating margins of 16%.
Earnings per share for the fourth quarter of 2019 are expected to be $0.37 to $0.38.
Guidance for the first quarter of 2020 will be updated during the fourth quarter 2019 conference call. Core expects consolidated first quarter 2020 revenue of approximately $159,000,000 to $164,000,000, with operating income of approximately $25,000,000 to $27,000,000, yielding operating margins of 16%.
EPS for the first quarter of 2020 is expected to be approximately $0.39 to $0.41.
The Company's revised fourth quarter 2019 and initial first quarter 2020 guidance are based on projections for the underlying operations, excludes gains or losses in foreign exchange and assumes an effective tax rate of 20%.
CLB shares opened Tuesday down $9.37, or 19.7%, to $38.12
