Oilfield Services: Schlumberger Pops On Earnings, Baker Hughes Drops

Michael Teague |

Shares for Schlumberger Limited (SLB) , by far the world’s largest oilfield services company with a market cap of $104.3 billion, jumped well over 5 percent early in Friday trading to $82.74 on news of impressive second-quarter earnings.

For Q2, Schlumberger reported earnings of $2.1 billion, or $1.57 per share on revenue of $11.18 billion, compared to the prior-year period during which the company earned $1.4 billion, or $1.05 per share on revenue of $10.34 billion. Excluding items, earnings-per-share came in at $1.15, ahead of expectations of $1.10, while total revenue for the quarter was well ahead of expectations of $11.11 billion.

$7.7 billion of total revenue came from Schlumberger’s international operations, and this helped the company to its seventh consecutive estimate-beating earnings report, as drilling in Australia and China made somewhat of a comeback, and growth was seen in the Iraqi and Saudi markets.

Similar to one of its closest competitors Baker Hughes (BHI) , Schlumberger saw an increase in activity in the Gulf of Mexico, as well as an uptick in the use of the company’s hydraulic fracturing equipment. But the firm’s global reach was insulated to some extent from a number of problems on the US oil market, including the decline in both demand and production of natural gas.

Baker Hughes also reported on Friday, showing Q2 net income down to $240 million, for an adjusted $0.61 per share on revenue of $5.5 billion, compared to the prior year quarter when the company netted $439 million, or $1 per share on revenue of $5.3 million. The company saw a 1 percent year-over-year increase in profit from the Middle-East/Asia-Pacific region, but all other segments came up shorter, especially in North America, with pre-tax margins down 5 percent on the prior year.

Shares for Baker Hughes fell nearly 3 percent on Friday to $47.65.

Another major oilfield services company, the infamous Halliburton (HAL) , reports earnings on Monday, with analysts expecting a decline in profits.

[Image: Schlumberger's research facility in Cambridge. Courtesy of Wikimedia Commons]

 

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Companies

Symbol Name Price Change % Volume
BHI Baker Hughes Incorporated 49.24 -0.91 -1.81 3,602,859
HAL Halliburton Company 41.84 -0.81 -1.90 7,191,650
MTCP Merecot Corp n/a n/a n/a 0
SLB Schlumberger N.V. 75.92 -1.09 -1.42 6,847,404

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