Why Core Laboratories N.V. Stock Dropped Today

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Core Laboratories N.V. (NYSE: CLB  ) fell 10% today after reporting second quarter earnings.

So what: Revenue was up just 2% in the quarter to $267.6 million and net income was up 7% to $63.7 million, or $1.42 per share. On an adjusted basis, earnings were $1.35 per share, a penny ahead of estimates, but the top line missed analysts' $279.0 million mark. 

Now what: There weren't any real shocks in the report and management even said that earnings would be at the high end of its revised range and revenue would be at the middle of the new range. But the bigger concern long-term is that growth is stuck in neutral, which isn't good for a company priced at 25 times this year's earnings estimates. It's that price that is going to keep me out of the stock and even though I like Core Lab's business I'm wary of dropping exploration spending by big oil and dropping fossil fuel demand in developed markets because that means that their target market is no longer growing either.

OPEC is absolutely terrified of this game-changer
Imagine a company that rents a very specific and valuable piece of machinery for $41,000 per hour (That's almost as much as the average American makes in a year!). And Warren Buffett is so confident in this company's can't-live-without-it business model, he just loaded up on 8.8 million shares. An exclusive, brand-new Motley Fool report reveals the company we're calling OPEC's Worst Nightmare. Just click HERE to uncover the name of this industry-leading stock... and join Buffett in his quest for a veritable landslide of profits!


Read/Post Comments (0) | Recommend This Article (5)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 3043748, ~/Articles/ArticleHandler.aspx, 12/22/2014 8:07:39 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement