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Schlumberger (SLB) Q2 Earnings Beat, Revenues Miss Estimates
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Oilfield service giant Schlumberger Limited’s (SLB - Free Report) second-quarter 2018 earnings of 43 cents per share (excluding charges and credits) beat the Zacks Consensus Estimate of 42 cents and improved from the year-ago quarter’s figure of 35 cents.
Schlumberger Limited Price, Consensus and EPS Surprise
The company posted total revenues of $8,303 million, which improved from $7,462 million in the prior-year quarter. However, the figure lagged the Zacks Consensus Estimate of $8,337 million.
The results were driven by a rebound in drilling activities in Russia and the North Sea. Higher demand for directional drilling techniques, especially in the domestic onshore market supported the numbers. However, it was partially offset by increased costs related to the mobilization of resources for new projects internationally
Segmental Performance
Drilling Group and Production Group registered year-over-year increase in revenues, while Reservoir Characterization results declined from the year-ago quarter’s tally.
Drilling Group revenues increased primarily on contributions from the international market. Rebound in seasonal works beyond the Northern Hemisphere contributed to growth. The commissioning of new projects in India, Mexico and Middle East, North America and Australia supported the top line. However, the positives were partially negated by higher costs related to the mobilization of resources for new projects internationally.
Results in the Production Group were positively impacted by higher hydraulic fracturing work in the domestic land market. Pricing recovery in the North American land areas, improved unconventional land works along with higher activities in China and Russia led to the improvement. Moreover, stimulation and coiled tubing work along with higher completions product sales aided growth in Saudi Arabia.
Lower WesternGeco activity led to decline in revenues of Reservoir Characterization segment, which was partially offset by strong contributions from the international market. Higher contributions from OneSurface integrated production system projects in Kuwait and Egypt along with higher license sales in Mexico, Brazil, Russia and Kuwait drove results. Higher wireline revenues from the North America as well as new contracts in the Far East and Australia also propelled the business unit.
Revenues in the Reservoir Characterization unit totaled $1,636 million, down from $1,759 million in the prior-year quarter. Pre-tax operating income was $350 million, up 17% year over year and beating the Zacks Consensus Estimate of $331 million.
Revenues in the Drilling Group totaled $2,234 million, up 6% year over year. Pre-tax operating income was $289 million, down 4% year over year. Also, the figure lagged the Zacks Consensus Estimate of $353 million.
Revenues in the Production Group rallied 30% from the year-earlier quarter to $3,257 million. Pre-tax operating income jumped43% year over year to $316 million and surpassed the Zacks Consensus Estimate of $302 million.
Revenues in the Cameron Group amounted to $1,295 million, up2% year over year. Pre-tax operating income plunged 5% from the prior-year quarter’s figure to $166 million and beat the Zacks Consensus Estimate of $151 million
Financials
As of Jun 30, 2018, the company had approximately $3,049 million in cash and short-term investments and $13,865 million in long-term debt. This represents a debt-to-capitalization ratio of 27.3%. In the April-to-June quarter, the company repurchased 1.5 million shares.
Q2 Price Performance
During the second quarter, Schlumberger’s shares gained 3.5% compared with the industry’s 4.1% rise. Zacks Rank & Key Picks
Schlumberger currently has a Zacks Rank #3 (Hold).
A few better-ranked players in the same sector are Occidental Petroleum Corporation (OXY - Free Report) and China Petroleum and Chemical Corporation , also known as Sinopec, and CVR Refining, LP . All these stocks flaunt a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Occidental Petroleum is an international oil and gas exploration and production company. It pulled off an average positive earnings surprise of 30.2% in the last four quarters.
Sinopec is one of the largest petroleum and petrochemical companies in Asia. The company delivered an average positive earnings surprise of 492.8% in the trailing four quarters.
Sugar Land, TX-based CVR Refining is an independent downstream energy partnership with refining and associated logistics properties in the Midcontinent United States. The company delivered an average positive earnings surprise of 7.05% in the last four quarters.
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Schlumberger (SLB) Q2 Earnings Beat, Revenues Miss Estimates
Oilfield service giant Schlumberger Limited’s (SLB - Free Report) second-quarter 2018 earnings of 43 cents per share (excluding charges and credits) beat the Zacks Consensus Estimate of 42 cents and improved from the year-ago quarter’s figure of 35 cents.
Schlumberger Limited Price, Consensus and EPS Surprise
Schlumberger Limited Price, Consensus and EPS Surprise | Schlumberger Limited Quote
The company posted total revenues of $8,303 million, which improved from $7,462 million in the prior-year quarter. However, the figure lagged the Zacks Consensus Estimate of $8,337 million.
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The results were driven by a rebound in drilling activities in Russia and the North Sea. Higher demand for directional drilling techniques, especially in the domestic onshore market supported the numbers. However, it was partially offset by increased costs related to the mobilization of resources for new projects internationally
Segmental Performance
Drilling Group and Production Group registered year-over-year increase in revenues, while Reservoir Characterization results declined from the year-ago quarter’s tally.
Drilling Group revenues increased primarily on contributions from the international market. Rebound in seasonal works beyond the Northern Hemisphere contributed to growth. The commissioning of new projects in India, Mexico and Middle East, North America and Australia supported the top line. However, the positives were partially negated by higher costs related to the mobilization of resources for new projects internationally.
Results in the Production Group were positively impacted by higher hydraulic fracturing work in the domestic land market. Pricing recovery in the North American land areas, improved unconventional land works along with higher activities in China and Russia led to the improvement. Moreover, stimulation and coiled tubing work along with higher completions product sales aided growth in Saudi Arabia.
Lower WesternGeco activity led to decline in revenues of Reservoir Characterization segment, which was partially offset by strong contributions from the international market. Higher contributions from OneSurface integrated production system projects in Kuwait and Egypt along with higher license sales in Mexico, Brazil, Russia and Kuwait drove results. Higher wireline revenues from the North America as well as new contracts in the Far East and Australia also propelled the business unit.
Revenues in the Reservoir Characterization unit totaled $1,636 million, down from $1,759 million in the prior-year quarter. Pre-tax operating income was $350 million, up 17% year over year and beating the Zacks Consensus Estimate of $331 million.
Revenues in the Drilling Group totaled $2,234 million, up 6% year over year. Pre-tax operating income was $289 million, down 4% year over year. Also, the figure lagged the Zacks Consensus Estimate of $353 million.
Revenues in the Production Group rallied 30% from the year-earlier quarter to $3,257 million. Pre-tax operating income jumped43% year over year to $316 million and surpassed the Zacks Consensus Estimate of $302 million.
Revenues in the Cameron Group amounted to $1,295 million, up2% year over year. Pre-tax operating income plunged 5% from the prior-year quarter’s figure to $166 million and beat the Zacks Consensus Estimate of $151 million
Financials
As of Jun 30, 2018, the company had approximately $3,049 million in cash and short-term investments and $13,865 million in long-term debt. This represents a debt-to-capitalization ratio of 27.3%. In the April-to-June quarter, the company repurchased 1.5 million shares.
Q2 Price Performance
During the second quarter, Schlumberger’s shares gained 3.5% compared with the industry’s 4.1% rise.
Zacks Rank & Key Picks
Schlumberger currently has a Zacks Rank #3 (Hold).
A few better-ranked players in the same sector are Occidental Petroleum Corporation (OXY - Free Report) and China Petroleum and Chemical Corporation , also known as Sinopec, and CVR Refining, LP . All these stocks flaunt a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Occidental Petroleum is an international oil and gas exploration and production company. It pulled off an average positive earnings surprise of 30.2% in the last four quarters.
Sinopec is one of the largest petroleum and petrochemical companies in Asia. The company delivered an average positive earnings surprise of 492.8% in the trailing four quarters.
Sugar Land, TX-based CVR Refining is an independent downstream energy partnership with refining and associated logistics properties in the Midcontinent United States. The company delivered an average positive earnings surprise of 7.05% in the last four quarters.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
It's not the one you think.
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