Schlumberger Net Up, Falters on Ests - Analyst Blog
21 Abril 2011 - 5:04AM
Zacks
The world’s largest oilfield
services provider Schlumberger Ltd.
(SLB) reported weaker-than-anticipated
first-quarter 2011 results. This was mainly due to geopolitical
disturbances and typical seasonality factors in certain
regions.
Earnings per share, excluding
special items, came in at 71 cents, missing the Zacks Consensus
Estimate of 76 cents. Revenue, at $8,716 million, was also shy of
the Zacks Consensus Estimate of $8,959 million.
Though Schlumberger could not match
the soaring profit gains posted by Halliburton Co.
(HAL ) – the second-largest member of the
oilfield services contingent – it improved significantly from last
year’s comparable period.
Compared to the first quarter of
2010, Schlumberger’s adjusted earnings per share improved 14.5%
(from 62 cents to 71 cents) and quarterly revenue rose 55.7% (from
$5,598 million to $8,716 million). This was driven by the strength
and sustainability of the all-important North American activity
levels, where the Houston, Texas-based company’s ‘Reservoir
Production Group’ continued to make robust gains.
Segmental
Highlights
Oilfield Services:
Schlumberger’s ‘Oilfield Services’ segment revenues were down 4%
sequentially but was up 45% year over year to $8,122 million.
Segment pretax operating income was $1,455 million, a 14%
sequential fall but an increase of 40% from the year-earlier
level.
The decrease from the previous
quarter can be attributed to abnormally seasonal weather (in U.S.
and Australia) and disruptions in the Middle East/North Africa
markets. However, buoyed by increased demand and pricing gains for
the ‘Reservoir Production’ group, segment results recovered from
the year-earlier levels. Excellent performance at Integrated
Project Management (IPM) Well Construction (particularly in Iraq)
also contributed to the performance.
Distribution:
Beginning with the first quarter of 2011, Schlumberger has started
to report its ‘Distribution’ business as a separate and distinct
segment. Revenue for this segment increased 4% sequentially to $601
million. Pretax operating income also improved from the fourth
quarter of 2010, up 7% to $22 million.
Capital Expenditure,
Balance Sheet, & Share Repurchase
Schlumberger’s capital expenditure
in the first quarter was $770 million. As of March 31, 2011, the
company had approximately $4,163 million in cash and $6,422 billion
in long-term debt, representing a debt-to-capitalization ratio of
17.0%. During the March quarter, Schlumberger purchased 9.7 million
of its shares at an average price of $87.18 for about $844
million.
Outlook
Schlumberger's management pointed
out that first quarter profitability suffered from the turmoil in
the Middle East/Africa, and extreme weather conditions in the U.S.
and Australia, which were partially offset by strong demand for its
services in North America.
Going forward, Schlumberger
anticipates benefiting from demand improvements in select North
American basins, as operators continue to make the exploitation of
unconventional resources the focus of their investment.
The oilfield services behemoth
believes that bullish near-term U.S. land drilling trends – where
activity is being driven by horizontal drilling and liquids-rich
plays – will be supported by high oil prices.
At the same time, the company
expects activity in the Gulf of Mexico and Middle East to
progressively mobilize over the next six months.
Our
Recommendation
Schlumberger shares currently
retain a Zacks #3 Rank, which translates into a short-term Hold
rating. We are also maintaining our long-term Neutral
recommendation on the stock.
We like Schlumberger’s lead
position in the global oilfield services market, along with its
broad and technologically-complex product and service offerings,
and its robust financial profile. Since the last few quarters, the
company has been benefiting from increased activity in the
unconventional oil and gas shale plays in North America, which have
more than made up for the drop in deepwater Gulf of Mexico
activity.
However, the oilfield services
sector’s biggest player continues to feel pressure from intense
competition in the market, depressed natural gas prices and the
expected curtailment in incremental drilling projects.
As such, we see the stock
performing in line with the broader market and prefer to remain on
the sidelines.
HALLIBURTON CO (HAL): Free Stock Analysis Report
SCHLUMBERGER LT (SLB): Free Stock Analysis Report
Zacks Investment Research
Schlumberger (NYSE:SLB)
Gráfico Histórico do Ativo
De Jun 2024 até Jul 2024
Schlumberger (NYSE:SLB)
Gráfico Histórico do Ativo
De Jul 2023 até Jul 2024