Core Laboratories sees Q2 EPS 64c-66c, consensus 66c
Expects Q2 revenue $177M-$179M, consensus $180.42M. The company believes Q2 international exploration and production activity levels will be flat sequentially, with most international development projects continuing to be funded largely from operating budgets. Core Lab expects the average Q2 U.S. rig count to be slightly up sequentially, with completion activity levels showing modest growth. Core Lab believes the U.S. completion growth rate will moderate until logistical bottlenecks are resolved. Core expects Reservoir Description revenue and operating margins to be similar to Q1 due to continued muted international activity levels. This is consistent with other international service company commentary. Incremental margins of 50% are expected in Q2. Q2 EPS guidance excludes gains or losses in foreign exchange and assumes an effective tax rate of 15%. Several consecutive years of significant international under-investment will lead to steepening legacy declines in crude oil production outside of North America, the Middle East and the former Soviet Union. Therefore, Core has an optimistic view for 2018's industry activity and Core's financial performance. Client planning for international and offshore projects are in the early stages. This will benefit Core's leverage to both markets, especially in late 2018 and 2019.