HOUSTON – October 29, 2026 -- Core Laboratories (NYSE: CLB) posted third-quarter 2026 revenue of $132.1 million, up 6% sequentially and down 2% year over year, as international demand lifted both operating segments.
Ex-items operating income climbs 35% sequentially but trails last year by 24%
GAAP operating income was $12.1 million, and GAAP earnings per diluted share were $0.12. Operating income excluding items reached $12.6 million, up 35% sequentially and down 24% year over year. That yielded a 10% operating margin and sequential incremental margins of 43%. EPS excluding items was $0.16, up 46% from the prior quarter and down 27% from a year earlier.
CEO Larry Bruno cited growth in Europe-Africa, Asia-Pacific, Latin America and the Middle East, and described a "gradual improvement" in Middle East activity late in the quarter. He said geopolitical conflicts in the Middle East and Russia-Ukraine still weigh on parts of the business.
Reservoir Description revenue rises 7% to $84.3 million at a 78% incremental margin
The segment, which draws about 80% of revenue from projects outside the United States, reported GAAP operating income of $7.7 million. Excluding items, operating income was $8.1 million, a 10% margin. Revenue was down 4% year over year. Laboratory project work in Europe-Africa, Asia-Pacific, Latin America and the Middle East drove the sequential gain.
Middle East assay demand improved modestly late in the quarter but stayed below pre-conflict levels. Sanctions and instability tied to the Middle East and Russia-Ukraine continued to suppress these services.
A leading Middle East national oil company awarded Core an expanded analytical program for its unconventional reservoirs after an initial characterization study. The program uses the PRISM workflow, High Frequency NMR, NANO-k 100 Nano Permeametry and the SMP-200 Shale Matrix Permeameter. Separately, Omega Oil and Gas engaged Core to evaluate more than 360 feet of core and sidewall cores from two appraisal wells in Queensland's Taroom Trough. The analysis is under way at Core's Perth laboratory.
Production Enhancement product sales jump 14% as revenue reaches $47.8 million
Segment revenue rose 4% sequentially and 3% year over year. GAAP operating income was $4.3 million, or $4.4 million excluding items, a 9% margin. U.S. land and international product sales both increased, with international gains in Europe, Asia-Pacific and the Middle East. Delays to several large Gulf of America diagnostic projects originally scheduled for the quarter reduced revenue and margins.
A North American oilfield service company is expanding use of Core's AERO perforating platform (AERO FLEX, AERO POINT and AERO SET) across its North American operations after a successful field deployment. A Brazilian independent operator is extending Core's SpectraFlood tracer technology across its portfolio of more than 50 conventional assets after a polymer treatment showed delayed tracer breakthrough.
Free cash flow reaches $1.7 million as working capital absorbs cash
Cash from operations was $5.0 million against $3.3 million in operating capital expenditures. Higher raw material costs for perforating systems raised the cost of carrying inventory. Rising activity late in the quarter lifted accounts receivable, and both factors increased working capital as of September 30.
Core repurchased 87,873 shares for about $1.1 million in aggregate. Net debt fell $200,000 to $93.4 million, and the leverage ratio stayed under 1.50. The company also announced its fourth-quarter 2026 dividend.
Capital expenditures of about $500,000 to restore the Aberdeen Advanced Technology Center, damaged by a February 2024 fire and covered by insurance, are excluded from free cash flow.