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The world's largest oil fields service company Schlumberger reported in line Q1 earnings Thursday. The report reflected the expected reduction in North America land activity and seasonal activity in the Northern Hemisphere. SLB expects improved oil sentiment. 

Schlumberger Vintage

Schlumberger Ltd NYSE: SLB Reported Before Open Thursday

$0.38 EPS as Expected Forecast AND $7.9 Billion Beat $7.8 Billion Forecast in Revenue 

Earnings 

Schlumberger Ltd. (NYSE: SLB) reported first-quarter earnings net income of $421 million, or 30 cents a share, vs. $525 million, or 38 cents a share, in the year-earlier period. The per-share earnings matched the average estimate of analysts polled by FactSet. Revenue was $7.9 billion vs. $7.8 billion in the first three months of 2018.

Revenue from the company's North American operations fell to $2.7 billion from $2.8 billion a year ago. International revenue also fell to $5 billion vs. $5.2 billion.With big falls in oil but record production in both oil and gas this report is indicative for the energy sector

 

Schlumberger Ltd NYSE: SLB

Market Reaction> Pre-market $47.91 +0.50 (1.05%)

Highlights

  • Revenue from North America was 3% lower sequentially, driven by softer pricing and lower activity for both hydraulic fracturing- and drilling-related businesses.
  • International revenue increased 3% year-on-year to $5 billion. Reservoir Characterization, Drilling, and Production combined to deliver year-on-year revenue growth of 8%, on track with Schlumberger’s aim of reaching high single-digit growth in the international markets in 2019

“From a macro perspective, we expect the oil market sentiments to steadily improve over the course of 2019, supported by a solid demand outlook combined with the OPEC and Russia production cuts taking full effect, slowing shale oil production growth in North America, and a further weakening of the international production base as the impact of four years of underinvestment becomes increasingly evident,” said CEO Paal Kibsgaard.

Outlook

Schlumberger views E&P investments in the international markets to increase by 7% to 8% in 2019, supported by a higher rig count and a rise in the number of customer project FIDs. In North America, Schlumberger expects future E&P investment levels to likely be dictated by free cash flow and sees E&P investments in North America land down 10% in 2019.

 

Schlumberger Ltd Q4 Earnings Recap

$0.39 EPS Beat $0.36 Forecast AND $8.5 Billion Beat $8.062 Billion Forecast in Revenue 

Earnings 

Schlumberger Ltd. (NYSE: SLB) reported fourth-quarter earnings on a GAAP basis, of net income of $538 million or $0.39 per share compared to a net loss of $2.25 billion or $1.63 per share in the prior-year period. Adjusted net income dropped 25% year-over-year to $498 million or $0.36 per share. up 18% to $644 million or $0.46 per share, excluding charges and credits. Revenue grew 8% to $8.5 billion. The Street expected to report  Schlumberger earnings per share to fall 25% to 36 cents. Revenue was seen slipping 1% to $8.062 billion. 

With big falls in oil but record production in both oil and gas this report is indicative for the energy sector. 

Schlumberger Ltd NYSE: SLB

MarketReaction> Pre-market $43.62 USD +2.25 (+5.44%)

Highlights

      • During the fourth quarter, revenue in North America remained flat compared to the prior-year period.
      • International revenue increased by 1%.
      • Excluding Cameron, revenue in North America rose by 1% and International revenue grew by 3%.
      • Revenue in the Reservoir Characterization business unit increased 1% year-over-year.
      • During the quarter, the business benefited from several contract wins and new multiclient seismic surveys.
      • The Drilling unit recorded a year-over-year growth in revenue while the Production and Cameron units saw revenue declines.

 SLB Q4 2018 earnings

Schlumberger Chairman and CEO Paal Kibsgaard said, “Looking forward to 2019, we expect a more positive supply- and demand-balance sentiment to lead to a gradual recovery in the price of oil over the course of the year, as the OPEC and Russia cuts take full effect; the effect of lower activity in North America land in the second half of 2018 impacts production growth; the dispensations from the Iran export sanctions expire and are not renewed; and as the US and China continue to work toward a solution to their ongoing trade dispute.”

 

Source: SLB, AlphaStrret

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