Q4 2024 Core Laboratories Inc Earnings Call Transcript
Key Points
- Core Laboratories Inc (CLB) reported a 9% increase in earnings per share for the full year 2024 compared to 2023.
- The company successfully reduced its net debt by nearly $12 million in the fourth quarter, lowering its leverage ratio to 1.31, the lowest in eight years.
- Core Laboratories Inc (CLB) returned excess free cash to shareholders by repurchasing nearly 265,000 shares of company stock during the fourth quarter.
- The company experienced a higher level of international product sales in 2024 compared to 2023, despite challenges in the US market.
- Core Laboratories Inc (CLB) generated a significant improvement in free cash flow, reaching $43.4 million for the full year 2024, up from $14.2 million in 2023.
- Revenue for the fourth quarter was down 4% compared to the prior quarter, primarily due to a decrease in US onshore activity.
- Geopolitical conflicts and trade sanctions in regions like Russia, Ukraine, and the Middle East negatively impacted demand for laboratory services.
- The company's operating margins in Production Enhancement were low at 4% for the fourth quarter.
- Completion diagnostic services in the Gulf of Mexico were delayed due to hurricanes, affecting the company's schedule and revenue.
- Core Laboratories Inc (CLB) faced challenges with reduced manufacturing efficiencies due to lower US onshore sales, impacting cost of sales.
(audio in progress) and you saw an increase of 3%. In addition, while operating income and earnings per share were down sequentially for full-year 2024, the company's operating income was up 7% and earnings per share was up 9% compared to 2023.
In Reservoir Description, revenue for the fourth quarter was down 2% compared to Q3 of 2024 but up 3% from Q4 of last year, reflecting the continued market demand for our global rock and fluid laboratory services.
This year-over-year improvement occurred despite the ongoing trade sanctions and geopolitical conflicts in Russia, Ukraine, and the Middle East that continue to negatively impact demand for laboratory services that are specifically tied to the assay of crude oil and derived products. These geopolitical factors and sanctions are still producing headwinds to both revenue growth and operating margins for Reservoir Description.
Despite these hurdles for the fourth quarter, ex-items, operating
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