Schlumberger Takes Aim at New 52-Week High on Earnings

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Schlumberger Ltd. (SLB) reported third-quarter 2013 results before markets opened Friday morning. The oil field services firm posted adjusted diluted quarterly earnings per share (EPS) of $1.29 and revenues of $11.61 billion. In the same period a year ago, Schlumberger reported EPS of $1.04 on revenues of $10.50 billion. Third-quarter results also compare to the consensus estimates for EPS of $1.24 on revenues of $11.58 billion.

North American revenue rose 7% sequentially to $3.6 billion and international revenue rose 4% sequentially to $7.91 billion. Schlumberger's North American offshore business posted record quarterly revenue, and drilling in both Canada and the United States improved.

The company did not provide guidance in its press release, but the consensus estimate for the fourth quarter calls for EPS of $1.36 on revenues of $12.13 billion. For the full year, EPS is pegged at $4.76 on $45.55 billion in revenue. The full-year EPS estimate has risen by $0.09 since Schlumberger reported second-quarter earnings, and the revenue estimate has decreased by $30 million.

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The company's CEO said:

The international business grew further, with leading margins expanding in spite of some operational delays. Performance in North America was particularly strong despite continued pricing weakness in the land market. Operating margins exceeded 20% in all Areas and expanded in all Product Groups. … Overall, the market continues to support Brent prices at current levels while international natural gas prices remain steady. The upward E&P spend revision made in June continues to be confirmed by rig count improvement and increased customer activity. Within this landscape, we remain positive on the outlook for the industry.

Shares were up 2.1% in premarket trading Friday morning to $93.39, above the top of the current 52-week range of $66.85 to $92.40. Thomson Reuters had a consensus analyst price target of around $101.10 before the third-quarter results were announced.

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