Core Laboratories Q3 Earnings Surpass Estimates, Decline Y/Y

Core Laboratories Inc. CLB reported third-quarter 2025 adjusted earnings of 22 cents per share, which beat the Zacks Consensus Estimate of 19 cents. This can be attributed to the outperformance of the Production Enhancement segment. However, the bottom line decreased from the year-ago quarter’s reported figure of 27 cents due to the underperformance of the Reservoir Description segment.

This oilfield service provider reported third-quarter operating revenues of $134.5 million, beating the Zacks Consensus Estimate of $128 million. This can be attributed to the increased demand for CLB’s laboratory analytical services and completion diagnostic services in international regions. Additionally, the top line remained flat year over year.

Core Laboratories Inc. Price, Consensus and EPS Surprise

Core Laboratories Inc. price-consensus-eps-surprise-chart | Core Laboratories Inc. Quote

During the third quarter, the company repurchased 462,248 shares of common stock for a total of $5 million. Additionally, CLB reduced its debt leverage ratio to 1.10 and net debt by $3.4 million.

During the third quarter of 2025, the company's leverage ratio (calculated as total net debt divided by trailing twelve months adjusted EBITDA) remained at the lowest level in nine years.

CLB’s Segmental Performance in Q3

Reservoir Description: Revenues in this segment decreased 0.7% from the year-ago quarter to $88.2 million. However, the top line beat our estimation of $84 million, driven by increased demand for rock and fluid analysis across the company's global laboratory network.

Operating income decreased from $15.5 million in the year-ago period to $11.6 million and missed our estimate of $11.7 million.

Production Enhancement: This segment’s revenues increased 1.6% to $46.3 million from $45.6 million in the prior-year quarter. Moreover, the top line beat our estimate of $43.5 million.

Operating income increased from $2.6 million in the year-ago period to $4.9 million. Moreover, the operating income from this segment beat our estimate of $3.3 million. The outperformance in the Production Enhancement segment can be attributed to the increased international product sales and continued strong demand for proprietary completion diagnostic services.

Costs & Expenses of CLB

CLB reported total costs and expenses of $113.6 million in the third quarter, decreasing by 0.9% from the year-ago quarter’s level of $114.6 million. Our estimation for the metric was $113.5 million.

Details of CLB’s Q3 Financials & Dividends

As of Sept. 30, 2025, the company had cash and cash equivalents of $25.6 million and long-term debt of $114.1 million. CLB’s debt-to-capitalization was 29.1%.

Net cash provided by operating activities in the third quarter totaled $8.5 million, while capital expenditure amounted to $2 million. This led to a positive free cash flow of $6.5 million.

Core Laboratories’ board of directors approved a quarterly dividend of 1 cent per share to its common shareholders of record as of Nov. 3, 2025. The payout, which remains unchanged from the previous quarter, will be made on Nov. 24.

Management Remarks & Outlook

In the short term, potential tariff pressures and OPEC+’s decision to raise production levels are driving increased market volatility and softer commodity prices. However, the long-term fundamentals of global crude oil demand remain solid. Core Laboratories retains a positive multi-year outlook and continues to experience consistent activity across ongoing long-cycle developments, particularly in deepwater regions along the South Atlantic Margin, North and West Africa, Norway, the Middle East and select Asia Pacific areas. The company’s revenue potential from these awarded projects will continue to hinge on the geological success rates achieved by its clients.

For the fourth quarter of 2025, CLB expects revenues to range from $132 million to $136 million. Operating income is anticipated to be between $14 million and $16.1 million, with earnings per share expected to be between 18 cents and 22 cents.

Revenues for the Reservoir Description segment are anticipated to be between $88 million and $90 million, with operating income ranging from $11 million to $12.3 million.

Revenues for the Production Enhancement segment are expected to be between $44 million and $46 million, with operating income predicted to be between $2.9 million and $3.7 million.

The company anticipates an effective tax rate of 25% for the fourth quarter. Its guidance for the fourth quarter of 2025 is based on estimations for underlying operations and excludes any gains or losses from foreign exchange.

The IEA, EIA and OPEC+ project global crude oil demand to rise by 0.7-1.3 million barrels per day in 2025, with similar growth expected in 2026, led by non-OECD markets in Asia, India, the Middle East and Africa. The IEA’s September 2025 report highlights that accelerating decline rates in existing oil fields pose a growing long-term supply risk, underscoring the need for sustained investment in new developments to preserve energy security. Core Laboratories’ Reservoir Description and Production Enhancement services are well-positioned to support these ongoing investment needs.

Smaller, short-cycle crude oil projects are expected to remain highly sensitive to price fluctuations, with U.S. onshore drilling and completion activity reacting most immediately to market changes. Ongoing geopolitical tensions, tariff shifts and price volatility are also adding uncertainty to demand for laboratory services linked to the global oil trade.

Core Laboratories anticipates minimal impact from potential tariffs as over 75% of its revenues come from non-tariffed services. Most product sales — less than 25% of total revenues — are U.S.-made, with about half consumed domestically. The company continues to mitigate the limited effects of tariffs on imported raw materials used in its U.S. operations.

Key Projects & Technology Advancements

During the third quarter of 2025, client meetings across Asia-Pacific confirmed Core Laboratories’ participation in several major exploration and development projects spanning both conventional and unconventional plays. On Oct. 1, 2025, the company acquired Brazil-based Solintec, enhancing its geological service capabilities and strengthening its presence along the South Atlantic Margin. The Solintec acquisition aligns well with CLB's growth strategy and is expected to be immediately accretive to future earnings and return on invested capital.

During the same period, Core Laboratories strengthened its leadership in geological and reservoir analysis through multi-client studies in Brazil and West Africa, providing vital data to reduce deepwater exploration risks. Strong industry interest underscores rising demand for the company’s expertise, while a proprietary geomechanical study in Brazil further aided clients in optimizing drilling plans.

Core Laboratories also supported a major international operator in Norway with a complex deepwater plug and abandonment project. To isolate the wellbore, it deployed its proprietary HELIOS™ gun system, featuring ultra-high shot density and 360-degree annular coverage. The system optimized perforation flow, reduced tortuosity and improved perf-wash efficiency. The operator confirmed HELIOS™ delivered a faster, more cost-effective solution with enhanced plug integrity and operational reliability.

A Middle Eastern National Oil Company engaged Core Laboratories to assess individual stage production in a key step-out well. Using its FLOWPROFILER™ Engineered Delivery System oil tracer technology, CLB successfully mapped production across eleven stages, offering detailed insight into well performance where other methods had failed.

Core Laboratories currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Important Earnings at a Glance

While we have discussed CLB’s third-quarter results in detail, let us take a look at three other key reports in the Oil/Energy space.

A leading oilfield services company, Schlumberger Limited SLB, reported adjusted earnings per share of 69 cents, beating the Zacks Consensus Estimate of 66 cents. It recorded total quarterly revenues of $8.9 billion, which was roughly in line with the Zacks Consensus Estimate. SLB’s robust numbers reflect growth in the Digital segment and two months of contribution from the ChampionX acquisition.

SLB reported a free cash flow of $1.1 billion in the third quarter. As of Sept. 30, 2025, the company had approximately $3.6 billion in cash and short-term investments. It registered a long-term debt of $10.8 billion at the end of the quarter.

Another oil and gas equipment and services provider, Halliburton Company HAL, reported a third-quarter 2025 adjusted net income per share of 58 cents, beating the Zacks Consensus Estimate of 50 cents. The outperformance primarily reflects successful cost reduction initiatives. However, the bottom line fell from the year-ago adjusted profit of 73 cents due to softer activity in the North American region.

Revenues of $5.6 billion declined 1.7% year over year but beat the Zacks Consensus Estimate by 4%.

As of Sept. 30, 2025, the company had approximately $2 billion in cash/cash equivalents and $7.2 billion in long-term debt, representing a debt-to-capitalization ratio of 41.1. The company generated $488 million of cash flow from operations in the third quarter, leading to a free cash flow of $276 million.

The North American oilfield services company, Liberty Energy LBRT, reported an adjusted net loss of 6 cents per share, wider than the Zacks Consensus Estimate of a loss of 1 cent. Moreover, the bottom line decreased sharply from the year-ago quarter’s profit of 45 cents. Liberty Energy's underperformance can be attributed to macroeconomic headwinds accompanied by a slowdown in the industry’s frac activity and market pricing pressure.

Ahead of the earnings release, Liberty Energy’s board of directors increased the quarterly cash dividend by 13% to 9 cents per share, beginning in the fourth quarter of 2025. As of Sept. 30, Liberty Energy had approximately $13.4 million in cash and cash equivalents. The pressure pumper’s long-term debt of $253 million represented a debt-to-capitalization of 10.9%.

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