SLB Schlumberger Ltd

TAKING THE PULSE: The major oil-field-service providers are likely to continue benefiting in the second quarter from the boom in North American drilling and high oil prices around the world. They have been racing to become more efficient as rising demand from energy producers has been stretching them thin. Companies are particularly focused on developing technology to help them more efficiently unlock unconventional reserves, like those locked in shale formations. Deep-water drilling around the world is also an area of strength as drilling resumes in the Gulf of Mexico. However, continuing political unrest in North Africa continues to weigh on the industry's international performance.

 
   COMPANIES TO WATCH: 
 
   Halliburton Co. (HAL) reports July 18 

Wall Street Expectations: Analysts surveyed by Thomson Reuters, on average, project earnings of 72 cents a share on revenue of $5.65 billion. Prior-year profit was 53 cents, or 52 cents excluding income from discontinued operations, on revenue of $4.39 billion.

Key Issues: The second-largest oil-field-services company behind Schlumberger Ltd. (SLB) has seen its revenue surge lately. It reported record revenue of $5.3 billion in the first quarter, largely on rising U.S. demand. The company said in May it expects to increase its global work force by about 25% by year's end as a result. In April, it also said it has made a strong return to the Gulf of Mexico's deep waters and has emerged largely unscathed from its role in last year's deadly Deepwater Horizon oil spill. The company's international business hasn't rallied as swiftly as it has in North America, with its performance weighed down by turmoil in Libya.

 
   Schlumberger Ltd. (SLB) reports July 22 

Wall Street Expectations: The company is seen posting a profit of 85 cents a share on revenue of $9.2 billion. Prior-year earnings were 68 cents as revenue was $5.94 billion.

Key Issues: The largest global oilfield-services company has predicted demand will continue to grow amid a continuing rebound in North America and increased deep-water exploration activity as producers seek to replace oil supplies lost in North Africa's political unrest. Chief Executive Andrew Gould in April noted shortages forming for drilling and related services. He predicted supply would remain tight and expressed concerns about whether pricing would rise by the same degree. The company is poised to benefit as deep-water drilling activity resumes in the U.S. Gulf of Mexico, where Schlumberger traditionally has been a leader.

 
   Baker Hughes Inc. (BHI) reports July 25 

Wall Street Expectations: Analysts forecast earnings of 90 cents a share on revenue of $4.53 billion. A year earlier, the company had a profit of 23 cents, including 18 cents in acquisition-related and other charges, on revenue of $3.37 billion.

Key Issues: Baker Hughes' profits also have been soaring, aided by strong demand for its hydraulic fracturing services in North America. A combination of trimming costs and increasing efficiency boosted Baker Hughes's international margins in the first quarter despite political disruptions in the Middle East and North Africa. The company has been planning to add pressure-pumping fleets in North America in the second half of this year, though it doesn't expect to meet soaring demand for that service, which is needed to crack open unconventional oil and natural gas reservoirs.

 
   Weatherford International Ltd. (WFT) reports July 26 

Wall Street Expectations: Analysts forecast a profit of 15 cents on revenue of $2.9 billion, compared with a year-earlier loss of 4 cents, or adjusted earnings of 11 cents excluding charges related to fair-value adjustments and severance and investigation costs, on revenue of $2.44 billion.

Key Issues: Weatherford's earnings have continued to lag behind its competitors despite the North American rebound. In April the company provided a disappointing outlook for the second quarter, yet analysts expect revenue to rise as drilling picks up in international markets. Last month, Weatherford unveiled plans to sell noncore assets that could fetch $500 million to $1 billion in the next 12 to 18 months as it aims to increase its efficiency. It also reached a settlement with BP PLC (BP, BP.LN) in which it agreed to pay $75 million in exchange for some protection against litigation related to the Deepwater Horizon disaster last year. Insurance will cover that cost.

 
   Nabors Industries Ltd. (NBR) reports July 26 

Wall Street Expectations: Analysts anticipate a profit of 25 cents on revenue of $1.33 billion. Year-earlier earnings were 15 cents, or 19 cents excluding items such as foreign-exchange losses and international tax adjustments, on revenue of $917.8 million.

Key Issues: Nabors last month gave a disappointing outlook for the quarter and the year mostly on lower-than-expected performances in its pressure-pumping and international businesses. However, continued growth in its lower 48 U.S. business will partly offset the weakness. The company's Superior Well Services Inc. acquisition was affected more than expected by adverse weather in the Bakken and Marcellus shale formations while political unrest in the Middle East and other regions slowed prospective improvement internationally.

(The Thomson Reuters estimate and year-earlier earnings may not be comparable due to one-time items and other adjustments.)

-By Tess Stynes, Dow Jones Newswires; 212-416-2481; Tess.Stynes@dowjones.com

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