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SLB Q3 Earnings Beat on Higher Evaluation, Stimulation Activity
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SLB (SLB - Free Report) reported third-quarter 2023 earnings of 78 cents per share (excluding charges and credits), beating the Zacks Consensus Estimate by a penny. The bottom line considerably increased from the year-ago quarter’s earnings of 63 cents.
The oilfield service giant recorded total quarterly revenues of $8.31 billion, missing the Zacks Consensus Estimate of $8.32 billion. However, the top line improved from the year-ago quarter’s $7.48 billion.
Strong quarterly earnings were primarily driven by higher evaluation and stimulation activity in the international market.
Schlumberger Limited Price, Consensus and EPS Surprise
Revenues in the Digital & Integration unit totaled $982 million, up 9% from the year-ago quarter’s levels. Pre-tax operating income of $314 million was up 3% but missed the Zacks Consensus Estimate of $337 million. The outperformance resulted from an improvement in revenues from Asset Performance Solutions (APS) revenues in Ecuador. Increased exploration data sales in the U.S. Gulf of Mexico, Angola and Malaysia also aided the performances. The positives were, however, offset partially by a decline in profitability in APS and decreased APS revenue in Canada.
Revenues in the Reservoir Performance unit increased 15% year over year to $1.68 billion. Pre-tax operating income was $344 million, rising 41% and beating the Zacks Consensus Estimate of $339 million. The upside in profit was led by higher evaluation and stimulation activity in the international market.
Revenues in the Well Construction segment rose 11% from the year-earlier quarter’s level to $3.43 billion. Pre-tax operating income improved 14% to $759 million and beat the Zacks Consensus Estimate of $756 million. The segment received a boost from robust growth in the Middle East and Asia.
Revenues in the Production Systems segment amounted to $2.37 billion, up 10% from the year-ago quarter’s numbers. Pre-tax operating income improved 42% year over year to $319 million and surpassed the Zacks Consensus Estimate of $287 million. The segment was aided by strong sales in artificial lift, completions and surface production systems.
Cash Flow & Financials
SLB, carrying a Zacks Rank #3 (Hold), reported a free cash flow of $1.04 billion in the third quarter.
As of Sep 30, 2023, the company had approximately $3.74 billion in cash and short-term investments. It had a long-term debt of $11.15 billion at the end of the third quarter.
Outlook
SLB believes that overall market fundamentals are clearly in favor of its business activities. Strong growth awaits from international and offshore markets, and the leading oilfield service provider is expecting to benefit significantly from the region, where it has a significant footprint.
Matador Resources has a strong presence in the oil-rich core acres of the Wolfcamp and Bone Spring plays in the Delaware Basin. Promising oil price is likely to aid it in increasing production volumes. Matador acquired Advance Energy Partners Holdings, LLC, which comprises several oil and natural gas-producing properties and undeveloped acreage. MTDR expects the buyout to be accretive to important valuation and financial metrics.
In order to have a dominant presence in the Permian, ExxonMobil has entered into a staggering $59.5 billion all-stock deal to buy Pioneer Natural Resources . Pioneer Natural is one of the foremost oil producers operating in the Permian Basin, the most prolific basin in the industry.
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SLB Q3 Earnings Beat on Higher Evaluation, Stimulation Activity
SLB (SLB - Free Report) reported third-quarter 2023 earnings of 78 cents per share (excluding charges and credits), beating the Zacks Consensus Estimate by a penny. The bottom line considerably increased from the year-ago quarter’s earnings of 63 cents.
The oilfield service giant recorded total quarterly revenues of $8.31 billion, missing the Zacks Consensus Estimate of $8.32 billion. However, the top line improved from the year-ago quarter’s $7.48 billion.
Strong quarterly earnings were primarily driven by higher evaluation and stimulation activity in the international market.
Schlumberger Limited Price, Consensus and EPS Surprise
Schlumberger Limited price-consensus-eps-surprise-chart | Schlumberger Limited Quote
Segmental Performance
Revenues in the Digital & Integration unit totaled $982 million, up 9% from the year-ago quarter’s levels. Pre-tax operating income of $314 million was up 3% but missed the Zacks Consensus Estimate of $337 million. The outperformance resulted from an improvement in revenues from Asset Performance Solutions (APS) revenues in Ecuador. Increased exploration data sales in the U.S. Gulf of Mexico, Angola and Malaysia also aided the performances. The positives were, however, offset partially by a decline in profitability in APS and decreased APS revenue in Canada.
Revenues in the Reservoir Performance unit increased 15% year over year to $1.68 billion. Pre-tax operating income was $344 million, rising 41% and beating the Zacks Consensus Estimate of $339 million. The upside in profit was led by higher evaluation and stimulation activity in the international market.
Revenues in the Well Construction segment rose 11% from the year-earlier quarter’s level to $3.43 billion. Pre-tax operating income improved 14% to $759 million and beat the Zacks Consensus Estimate of $756 million. The segment received a boost from robust growth in the Middle East and Asia.
Revenues in the Production Systems segment amounted to $2.37 billion, up 10% from the year-ago quarter’s numbers. Pre-tax operating income improved 42% year over year to $319 million and surpassed the Zacks Consensus Estimate of $287 million. The segment was aided by strong sales in artificial lift, completions and surface production systems.
Cash Flow & Financials
SLB, carrying a Zacks Rank #3 (Hold), reported a free cash flow of $1.04 billion in the third quarter.
As of Sep 30, 2023, the company had approximately $3.74 billion in cash and short-term investments. It had a long-term debt of $11.15 billion at the end of the third quarter.
Outlook
SLB believes that overall market fundamentals are clearly in favor of its business activities. Strong growth awaits from international and offshore markets, and the leading oilfield service provider is expecting to benefit significantly from the region, where it has a significant footprint.
Zacks Rank & Stocks to Consider
Two better-ranked players in the energy space are Matador Resources Company (MTDR - Free Report) and Exxon Mobil Corporation (XOM - Free Report) . While ExxonMobil carries a Zacks Rank #2 (Buy), Matador Resources sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Matador Resources has a strong presence in the oil-rich core acres of the Wolfcamp and Bone Spring plays in the Delaware Basin. Promising oil price is likely to aid it in increasing production volumes. Matador acquired Advance Energy Partners Holdings, LLC, which comprises several oil and natural gas-producing properties and undeveloped acreage. MTDR expects the buyout to be accretive to important valuation and financial metrics.
In order to have a dominant presence in the Permian, ExxonMobil has entered into a staggering $59.5 billion all-stock deal to buy Pioneer Natural Resources . Pioneer Natural is one of the foremost oil producers operating in the Permian Basin, the most prolific basin in the industry.