Core Laboratories Inc. (CLB) stock plummeted over 5% in pre-market trading on Friday, following the company's fourth-quarter 2024 earnings release and a gloomy outlook for the first quarter of 2025, primarily due to geopolitical headwinds and challenging industry conditions.

The oil and gas services company reported a 4% sequential decline in revenue for the fourth quarter, attributing the drop to a decrease in U.S. onshore activity. The company's Reservoir Description segment, which provides rock and fluid analysis services, saw a 2% decline in revenue, while the Production Enhancement segment, focused on well-completion and production optimization, experienced a 7% drop.

Core Laboratories' earnings were significantly impacted by geopolitical conflicts and trade sanctions in regions like Russia, Ukraine, and the Middle East. These factors negatively affected the demand for laboratory services and product sales, creating headwinds for revenue growth and operating margins, particularly in the Reservoir Description segment.

Looking ahead to the first quarter of 2025, the company warned of further challenges. Recently expanded sanctions have disrupted the maritime movement and trading of crude oil and derived products, leading to a decline in demand for Core Laboratories' crude assay laboratory work. Additionally, severe weather conditions in the U.S. and Mediterranean regions have resulted in suspended client activities and facility closures, further hampering operations.

As a result, Core Laboratories projected a revenue range of $121 million to $127 million for the first quarter, with operating income ranging from $10.2 million to $12.8 million, reflecting operating margins of approximately 9%. The company's earnings per share for the first quarter is expected to range from $0.12 to $0.16, reflecting the impact of a higher effective tax rate.