Shares of oil service company Core Laboratories (CLB -2.20%) jumped 9% early today and remain up 5% as of 10 a.m. EDT. The bump in the stock price, which is down nearly 60% year to date, comes after the company reported its third-quarter earnings yesterday.
The company continues to struggle through the downturn in the oil industry due to impacts from the COVID-19 pandemic, as well as disruptions in the quarter from four tropical weather systems in the Gulf of Mexico.
But Core Labs was able to report free cash flow of $18.5 million, representing the 76th straight quarter of positive free-cash-flow generation.
As oil industry struggles continue, Core Labs announced last week that it was raising $60 million through a senior note issuance. The company will use the proceeds to reduce outstanding debt and improve liquidity available under its revolving credit facility. Chief Financial Officer Chris Hill said in a statement the move is a continuation of "our long-term strategy of reducing debt and Core Lab's debt leverage ratio."
The company's operations continue to reflect the slowdown in the sector. Overall revenue was down 9% sequentially, but the company believes it will see improving results as oil drillers use its services to lower costs and become more efficient.
Core Labs sees overall business trends improving slightly into the fourth quarter, assuming no "COVID-19-related retrenchments in client activity." It said it expects international projects that are underway to continue, and it may see modestly growing activity. Domestically, the company said the "trend of gradual improvement in U.S. land activity" is expected to continue.