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Leading oilfield services company, Schlumberger Limited is set to report its second-quarter 2013 results on Jul 19. Let’s see how things are shaping up prior to the announcement.

In the last quarter, the company’s earnings of $1.01 per share increased 5.2% year-over-year from 96 cents per share. The quarterly results were aided by the company’s strong international exposure along with focus on execution and integration capabilities. Also, the results were ahead of the Zacks Consensus Estimate of 99 cents.

Growth Factors this Past Quarter

In the first quarter, Schlumberger witnessed seasonal activity slowdowns in the North Sea, Russia and China, weather-related work delays in the Brunei, Malaysia & Philippines and Australasia GeoMarkets, and lower pricing as a result of excess capacity in the U.S. However, these sequential effects were partially offset by strong exploration and drilling activity in Angola, and strong winter project activity in Western Canada & Alaska.

Looking forward, Schlumberger’s overall outlook for 2013 remains largely unchanged from its earlier projections. The company remains unperturbed despite the main economies including China, the U.S. and the Eurozone witnessing mixed fortunes in the first quarter.

Schlumberger expects its international spending on exploration and production to climb 10% this year and activity to increase in the U.S. Gulf of Mexico. The company also expects steady growth in key regions that include Sub-Sahara Africa, Russia, the Middle East, China and Australia.

On the flip side, lower-than-expected rig activity and continued pricing weakness is keeping management apprehensive about its North American operations. However owing to Schlumberger’s far-reaching international presence and deep-water exploration, it faces less North America exposure than rivals like Baker Hughes Inc. .

Earnings Whispers?

Our proven model does not conclusively show that Schlumberger is likely to beat earnings estimates this quarter. This is because a stock needs to have both a positive earnings Expected Surprise Prediction or ESP (Read: Zacks Earnings ESP: A Better Method) and a Zacks Rank #1, 2 or 3 for this to happen. This is not the case here as you will see below.

Zacks ESP: The ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is -1.80%. This is because the Most Accurate estimate stands at $1.09 while the Zacks Consensus Estimate currently stands at $1.11.

Zacks Rank #3 (Hold): Schlumberger’s Zacks Rank #3 (Hold) when combined with an ESP of -1.80% lowers the predictive power of ESP, indicating the possibility of a decline in results. We caution against stocks with Zacks Ranks #4 and 5 (Sell rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks to Consider

Here are some companies you may want to consider as our model shows these have the right combination of elements to post an earnings beat this quarter.

W&T Offshore Inc. has earnings ESP of +9.09% and a Zacks Rank #1 (Strong Buy).

PetroQuest Energy Inc. has earnings ESP of +28.57% and a Zacks Rank #1 (Strong Buy).

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