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Schlumberger Q2 Earnings to Rise on North American Strength

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Schlumberger Limited (SLB - Free Report) is expected to see 10% to 15% growth in earnings per share in second-quarter 2018, per a presentation by Patrick Schorn at an energy conference held in San Francisco on Jun 12.

The company is consistently enhancing capacity in the North American land market, comprising services to hydraulic fracturing and drilling operations. Of late, customers are seeking to sand delivery and services related production separately. Many oilfield services players fail to be competent enough in both the spaces. 

Through ownership in sand mines, Schlumberger has the potential to beat other players in standalone sand allocation works. Thus, through both sand allocation and production services, the company has been generating cash flow to its full potential.

Per the report, Schlumberger is progressing well with operations off the coast of North America since customers prefer the company’s reliable and most advanced services, especially when the business scenario is challenging.

Buoyed by such positives, Schlumberger expects North American revenue growth of 12% to 13% through the second quarter of this year.

The situation for the company’s Middle East operations is different as Schlumberger expects revenue growth from these areas to lag expectations. Project delays and challenges faced by the start-up developments in India, Saudi Arabia and Iraq are guiding such downbeat sentiments.

Both North America and the Middle East strongly contribute to Schlumberger’s business. The solid backdrop for North American operations more than offset the gloomy Middle East picture which will likely support the company’s second-quarter earnings growth.

Based in Houston, TX, Schlumberger is the largest oilfield service player in the world. Over the past year, the company has gained 0.7% versus the 6.2% collective decline of stocks belonging to the industry.

Currently, Schlumberger carries a Zacks Rank #3 (Hold). A few better-ranked stocks in the energy space are Anadarko Petroleum Corporation , Eclipse Resources Corporation and Wildhorse Resource Development Corporation . While Anadarko carries a Zacks Rank #2 (Buy), Eclipse and Wildhorse sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

We expect Anadarko Petroleum to witness year-over-year earnings growth of 229.6% in 2018.

Eclipse is expected to record revenue growth of 13.5% through 2018.

Wildhorse will likely see year-over-year earnings growth of 309.3% in 2018.

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