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Why Is Schlumberger (SLB) Down 6.2% Since the Last Earnings Report?
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It has been about a month since the last earnings report for Schlumberger Limited (SLB - Free Report) . Shares have lost about 6.2% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
First-Quarter 2017 Results
Schlumberger Limited’s first-quarter 2017 earnings of $0.25 per share (excluding charges and credits) came in line with the Zacks Consensus Estimate. This may be attributed to improvement in production of the Kuwait and Egypt developments and increase in directional drilling works in North America.
However, the bottom line decreased substantially from $0.40 per share earned in the year-earlier quarter. Slowdown of drilling works in the international market resulted in the year-over-year deterioration.
Schlumberger reported total revenue of $6,894 million. The top line improved from the year-earlier level of $6,520 million but missed the Zacks Consensus Estimate of $6,977 million.
Segmental Performance
Each of the groups – Reservoir Characterization, Drilling Group, Production Group and Cameron Group – registered year-over-year decrease in revenues.
Drilling Group revenues decreased primarily due to pricing pressure and reduced drilling works in the International market. However, the negatives were partially mitigated by the improvement in operations related to directional drilling in North America.
Results of the Production Group were adversely impacted by lower drilling and hydraulic fracturing work in the Middle East. However, good hydraulic fracturing operations and recovery in pricing in North America partially offset the weakness.
Reservoir Characterization segment was affected by completions of developments from a lower backlog. However, progress in the production front from the Kuwait and Egypt developments partially offset the negatives.
Reservoir Characterization: This group posted revenues of $1,618 million as against $1,719 million in the prior-year quarter. Pre-tax operating income was $281 million, down 16% year over year.
Drilling Group: Revenues of $1,985 million plunged 20% year over year. Pre-tax operating income was $229 million, down 38% year over year.
Production Group: Revenues recorded by this group declined 8% from the year-earlier quarter to $2,187 million. Pre-tax operating income plummeted 47% year over year to $110 million.
Cameron Group: This segment generated revenues of $1,229 million, down 25% year over year. Pre-tax operating income plunged 31% from the prior-year comparable period to $162 million.
Financials
As of Mar 31, 2017, company had approximately $7,353 million in cash and short-term investments and $16,538 million in long-term debt. This represents a debt-to-capitalization ratio of 31.6%. In the January to March quarter, the company repurchased 4.7 million shares.
Guidance
During 2017, the company reaffirmed its decision to invest $2.2 billion. This is slightly higher than $2.1 billion spent in 2016.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month. There has been one revision higher for the current quarter compared to ten lower. While looking back an additional 30 days, we can see even more downward momentum. In the past month, the consensus estimate has shifted lower by 13% due to these changes.
At this time, Schlumberger's stock has an average Growth Score of 'C', though it is lagging a bit on the momentum front with a 'D'. Following the exact same course, the stock was allocated also a grade of 'D' on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'F'. If you aren't focused on one strategy, this score is the one you should be interested in.
The company's stock is suitable solely for growth based on our styles scores.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of this revision also indicates a downward shift. Interestingly, the stock has a Zacks Rank #3 (Hold). We are looking for an inline return from the stock in the next few months.
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Why Is Schlumberger (SLB) Down 6.2% Since the Last Earnings Report?
It has been about a month since the last earnings report for Schlumberger Limited (SLB - Free Report) . Shares have lost about 6.2% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
First-Quarter 2017 Results
Schlumberger Limited’s first-quarter 2017 earnings of $0.25 per share (excluding charges and credits) came in line with the Zacks Consensus Estimate. This may be attributed to improvement in production of the Kuwait and Egypt developments and increase in directional drilling works in North America.
However, the bottom line decreased substantially from $0.40 per share earned in the year-earlier quarter. Slowdown of drilling works in the international market resulted in the year-over-year deterioration.
Schlumberger reported total revenue of $6,894 million. The top line improved from the year-earlier level of $6,520 million but missed the Zacks Consensus Estimate of $6,977 million.
Segmental Performance
Each of the groups – Reservoir Characterization, Drilling Group, Production Group and Cameron Group – registered year-over-year decrease in revenues.
Drilling Group revenues decreased primarily due to pricing pressure and reduced drilling works in the International market. However, the negatives were partially mitigated by the improvement in operations related to directional drilling in North America.
Results of the Production Group were adversely impacted by lower drilling and hydraulic fracturing work in the Middle East. However, good hydraulic fracturing operations and recovery in pricing in North America partially offset the weakness.
Reservoir Characterization segment was affected by completions of developments from a lower backlog. However, progress in the production front from the Kuwait and Egypt developments partially offset the negatives.
Reservoir Characterization: This group posted revenues of $1,618 million as against $1,719 million in the prior-year quarter. Pre-tax operating income was $281 million, down 16% year over year.
Drilling Group: Revenues of $1,985 million plunged 20% year over year. Pre-tax operating income was $229 million, down 38% year over year.
Production Group: Revenues recorded by this group declined 8% from the year-earlier quarter to $2,187 million. Pre-tax operating income plummeted 47% year over year to $110 million.
Cameron Group: This segment generated revenues of $1,229 million, down 25% year over year. Pre-tax operating income plunged 31% from the prior-year comparable period to $162 million.
Financials
As of Mar 31, 2017, company had approximately $7,353 million in cash and short-term investments and $16,538 million in long-term debt. This represents a debt-to-capitalization ratio of 31.6%. In the January to March quarter, the company repurchased 4.7 million shares.
Guidance
During 2017, the company reaffirmed its decision to invest $2.2 billion. This is slightly higher than $2.1 billion spent in 2016.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month. There has been one revision higher for the current quarter compared to ten lower. While looking back an additional 30 days, we can see even more downward momentum. In the past month, the consensus estimate has shifted lower by 13% due to these changes.
Schlumberger Limited Price and Consensus
Schlumberger Limited Price and Consensus | Schlumberger Limited Quote
VGM Scores
At this time, Schlumberger's stock has an average Growth Score of 'C', though it is lagging a bit on the momentum front with a 'D'. Following the exact same course, the stock was allocated also a grade of 'D' on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'F'. If you aren't focused on one strategy, this score is the one you should be interested in.
The company's stock is suitable solely for growth based on our styles scores.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of this revision also indicates a downward shift. Interestingly, the stock has a Zacks Rank #3 (Hold). We are looking for an inline return from the stock in the next few months.