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Schlumberger (SLB) Q1 Earnings Meet, Investment Plan in Place

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Schlumberger Limited’s SLB first-quarter 2017 earnings of 38 cents per share (eliminating charges and credits) were in line with the Zacks Consensus Estimate. The bottom line rose from the year-earlier figure of 25 cents.

Total revenues of $7,829 million improved from the year-ago level of $6,894 million but failed to beat the Zacks Consensus Estimate of $7,852 million.  

Surge in North American directional land drilling operations and awards for Integrated Production Services (IPS) contracts supported the first-quarter results. This was offset partially by operations related to Testing Services in Qatar, Egypt and Brazil.

Segmental Performance

Each of the groups — Reservoir Characterization, Drilling Group and Production Group — recorded a year-over-year rise in earnings.

Drilling Group results increased primarily on contributions from the North American directional land drilling works.  

Results at the Production Group were mostly buoyed by IPS contracts. Higher North American activities also supported the outperformance.

The Reservoir Characterization segment was affected by lower Russian Wireline activity along with a drop in sales of Software Integrated Solutions. However, the negative was partially offset by operations related to Testing Services in Qatar, Egypt and Brazil.

Reservoir Characterization: Revenues totaled $1,556 million compared with $1,618 million in the year-earlier quarter. Pre-tax operating income grossed $307 million, up 9% year over year.

Drilling Group: Revenues of $2,126 million rose 7% year over year. Moreover, pre-tax operating income was $293 million, up 28% year over year.

Production Group: Revenues at this group increased 35% from the year-earlier quarter to $2,959 million. Pre-tax operating income skyrocketed 96% year over year to $216 million.

Cameron Group: This segment generated revenues of $1,310 million, up 7% year over year. Pre-tax operating income rose 2% from the prior-year period to $166 million.

Financials

As of Mar 31, 2018, the company had approximately $4,165 million in cash and short-term investments and $13,526 million in long-term debt. This represents a debt-to-capitalization ratio of 32.7%. In the January-to-March quarter, the company bought back 1.4 million shares.  

Guidance

For 2018, the company projects investments of $2 billion, almost in line with the 2017 and 2016 figures.

Schlumberger Limited Price, Consensus and EPS Surprise

Schlumberger Limited Price, Consensus and EPS Surprise | Schlumberger Limited Quote

Zacks Rank and Stocks to Consider

Schlumberger carries a Zacks Rank #3 (Hold). A few better-ranked players in the energy space are Mammoth Energy Services, Inc. TUSK, Baytex Energy Corp. BTE and Flotek Industries, Inc. FTK. All the stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Mammoth Energy is expected to witness a year-over-year rise of 246.5% in 2018 earnings.

Baytex managed to beat the Zacks Consensus Estimate in each of the last three quarters.

Flotek Industries is expected to see year-over-year earnings growth of 557.1% in 2018.

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