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Schlumberger (SLB) to Report Q2 Earnings: What's in Store?
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Schlumberger Limited (SLB - Free Report) is scheduled to report second-quarter 2018 earnings on Jul 20, before the opening bell.
In the last reported quarter, the company delivered a positive earnings surprise of 0.00%, courtesy of a surge in North American directional land drilling operations and awards for Integrated Production Services (IPS) contracts. Moreover, Schlumberger delivered an average positive earnings surprise of 6.4% in the last four quarters.
Let’s see how things are shaping up prior to the announcement.
Which Way Are Estimates Treading?
Let’s look at the estimate revisions to get a clear picture of analyst opinion on the stock before the earnings release.
Estimates for second-quarter earnings have seen no upward movement but three downward in the last 30 days. The Zacks Consensus Estimate of 43 cents reflects an improvement of about 22.9% from a year ago.
Further, analysts polled by Zacks expect revenues of $8,337 million for the second quarter, indicating a rise of 11.7% from a year ago.
Factors to Consider
Schlumberger is the largest oilfield services player in the world with access to every energy market. The company maintains the position as one of the key players on the back of all the operating business segments.
For the Drilling Group segment, The Zacks Consensus Estimate for pretax operating profit is $353 million, higher than $302 million reported in the second quarter of 2017.
Moreover, the Zacks Consensus Estimate for the Production Group business unit is pegged at $302 million, higher than $221 million in the prior-year quarter.
The Zacks Consensus Estimate for pretax operating income at the Reservoir Characterization segment is $331 million, higher than $299 million reported in the year-ago quarter.
Overall, higher crude price during the second quarter is expected to support oilfield players, involved in the setting up of wells.
The average monthly price of West Texas Intermediate (WTI) crude per barrel for the month of April, May and June of 2018 was recorded at $66.25, $69.98 and $67.87, respectively, per the U.S. Energy Information Administration. The crude hikecan beprimarily attributed to constant production curbs from OPEC and allies.
Nevertheless, we are concerned about Schlumberger’s lesser exposure to the U.S. shale plays — where more drillers have gathered following recovery in crude prices.Thus, the company is losing out on the opportunity to wincontracts from shale drillers of late.
Price Performance in Q2
During the second quarter, Schlumberger’s shares lost 1.8% compared with the industry’s 7.2% decline.
Earnings Whispers
Our proven model does not show that Schlumberger is likely to beat earnings this quarter. That is because a stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.
Earnings ESP: Earnings ESP for the company is -0.11%.You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Schlumberger carries a Zacks Rank #3, which when combined with an Earnings ESP of -0.11%, lowers the possibility of an earnings surprise.
Stocks to Consider
Though earnings beat looks uncertain for Schlumberger, here are some firms that you may want to consider on the basis of our model. These have the right combination of elements to post an earnings beat this quarter:
ConocoPhillips (COP - Free Report) , based in Houston, TX, is a major global exploration and production (E&P) company. The company has an Earnings ESP of +13.46% and flaunts a Zacks Rank #1.
Houston, TX-based EOG Resources, Inc (EOG - Free Report) is a major independent oil and gas exploration and production company. The company has an Earnings ESP of +4.60% and a Zacks Rank #1.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
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Schlumberger (SLB) to Report Q2 Earnings: What's in Store?
Schlumberger Limited (SLB - Free Report) is scheduled to report second-quarter 2018 earnings on Jul 20, before the opening bell.
In the last reported quarter, the company delivered a positive earnings surprise of 0.00%, courtesy of a surge in North American directional land drilling operations and awards for Integrated Production Services (IPS) contracts. Moreover, Schlumberger delivered an average positive earnings surprise of 6.4% in the last four quarters.
Let’s see how things are shaping up prior to the announcement.
Which Way Are Estimates Treading?
Let’s look at the estimate revisions to get a clear picture of analyst opinion on the stock before the earnings release.
Estimates for second-quarter earnings have seen no upward movement but three downward in the last 30 days. The Zacks Consensus Estimate of 43 cents reflects an improvement of about 22.9% from a year ago.
Further, analysts polled by Zacks expect revenues of $8,337 million for the second quarter, indicating a rise of 11.7% from a year ago.
Factors to Consider
Schlumberger is the largest oilfield services player in the world with access to every energy market. The company maintains the position as one of the key players on the back of all the operating business segments.
For the Drilling Group segment, The Zacks Consensus Estimate for pretax operating profit is $353 million, higher than $302 million reported in the second quarter of 2017.
Moreover, the Zacks Consensus Estimate for the Production Group business unit is pegged at $302 million, higher than $221 million in the prior-year quarter.
The Zacks Consensus Estimate for pretax operating income at the Reservoir Characterization segment is $331 million, higher than $299 million reported in the year-ago quarter.
Overall, higher crude price during the second quarter is expected to support oilfield players, involved in the setting up of wells.
The average monthly price of West Texas Intermediate (WTI) crude per barrel for the month of April, May and June of 2018 was recorded at $66.25, $69.98 and $67.87, respectively, per the U.S. Energy Information Administration. The crude hikecan beprimarily attributed to constant production curbs from OPEC and allies.
Nevertheless, we are concerned about Schlumberger’s lesser exposure to the U.S. shale plays — where more drillers have gathered following recovery in crude prices.Thus, the company is losing out on the opportunity to wincontracts from shale drillers of late.
Price Performance in Q2
During the second quarter, Schlumberger’s shares lost 1.8% compared with the industry’s 7.2% decline.
Earnings Whispers
Our proven model does not show that Schlumberger is likely to beat earnings this quarter. That is because a stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.
Earnings ESP: Earnings ESP for the company is -0.11%.You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Schlumberger carries a Zacks Rank #3, which when combined with an Earnings ESP of -0.11%, lowers the possibility of an earnings surprise.
Stocks to Consider
Though earnings beat looks uncertain for Schlumberger, here are some firms that you may want to consider on the basis of our model. These have the right combination of elements to post an earnings beat this quarter:
Occidental Petroleum Corporation (OXY - Free Report) is an international oil and gas exploration and production company. The company has an Earnings ESP of +6.84% and sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
ConocoPhillips (COP - Free Report) , based in Houston, TX, is a major global exploration and production (E&P) company. The company has an Earnings ESP of +13.46% and flaunts a Zacks Rank #1.
Houston, TX-based EOG Resources, Inc (EOG - Free Report) is a major independent oil and gas exploration and production company. The company has an Earnings ESP of +4.60% and a Zacks Rank #1.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>