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Schlumberger (SLB) Q3 Earnings Match Estimates, Revenues Miss
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Schlumberger Limited (SLB - Free Report) announced third-quarter 2021 earnings of 36 cents per share (excluding charges and credits), in line with the Zacks Consensus Estimate. The bottom line increased significantly from the year-ago quarter’s profit of 16 cents.
The oilfield service giant recorded total revenues of $5,847 million, which missed the Zacks Consensus Estimate of $5,940 million but improved 11% from the year-ago quarter’s $5,258 million.
The quarterly earnings were aided by a surge in stimulation activity in Argentina, stronger North American rig activity along with ramped up drilling operations at offshore and onshore international resources. This was offset by lower contributions related to Digital & Integration from Europe/CIS/Africa.
Schlumberger Limited Price, Consensus and EPS Surprise
Like Schlumberger, another oilfield service major Halliburton Company (HAL - Free Report) reported in-line third-quarter earnings. However, Baker Hughes Company (BKR - Free Report) , a leading player in the same space, missed third-quarter earnings estimates.
Segmental Performance
Revenues in the Digital & Integration unit totaled $812 million, up 10% from the year-ago quarter’s levels. Pre-tax operating income of $284 million was up 42% year over year. The outperformance was owing to higher contributions from the Asset Performance Solutions (APS) projects. This was offset partially by a decline in contributions from Europe/CIS/Africa.
Revenues in the Reservoir Performance unit declined 2% year over year to $1,192 million. Pre-tax operating income was $190 million, surging 85% year over year. The upside in profit was led by a surge in stimulation activity in Argentina along with increased wireline evaluation activity in Guyana and Mexico.
Revenues in the Well Construction segment rose 24% from the year-earlier quarter’s levels to $2,273 million. Pre-tax operating income improved 99% year over year to $345 million. Stronger North American rig activity along with ramped up drilling operations at offshore and onshore international resources aided the uptick.
Revenues in the Production Systems segment amounted to $1,674 million, up 9% from the year-ago quarter’s numbers. Pre-tax operating income rose 26% from the prior-year quarter’s levels to $166 million. An increase in sales of well and surface production systems was responsible for the improvements. This was offset partially by lower sales related to midstream production systems.
Cash Flow
Despite the company’s $42 million of severance payments through the September quarter, the oilfield service firm generated free cash flow of $671 million.
Financials
Capital expenditures in the quarter were recorded at $273 million. As of Sep 30, 2021, the company had approximately $2,942 million in cash and short-term investments. It had long-term debt of $14,370 million at third quarter-end, representing a debt to capitalization of almost 53%.
Forward View
Schlumberger projects its 2021 capital investment at $1.6 billion. Last year, the figure was $1.5 billion. The company anticipates to complete this year with robust momentum and projects continued growth in the December quarter.
Fuel demand has improved drastically, so has oil price, thanks to the rolling out of coronavirus vaccines at a massive scale. The company expects this trend to continue for the next few years, which will drive upstream investment, especially in international resources. Being a leading player in the oilfield service space, the company expects to capitalize on improving demand for oilfield services.
Zacks Rank & Other Stock to Consider
The company carries a Zacks Rank #2 (Buy). Another prospective stock from the energy space is Whiting Petroleum Corporation , sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Whiting Petroleum has witnessed upward earnings estimate revisions for 2021 in the past 30 days.
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Schlumberger (SLB) Q3 Earnings Match Estimates, Revenues Miss
Schlumberger Limited (SLB - Free Report) announced third-quarter 2021 earnings of 36 cents per share (excluding charges and credits), in line with the Zacks Consensus Estimate. The bottom line increased significantly from the year-ago quarter’s profit of 16 cents.
The oilfield service giant recorded total revenues of $5,847 million, which missed the Zacks Consensus Estimate of $5,940 million but improved 11% from the year-ago quarter’s $5,258 million.
The quarterly earnings were aided by a surge in stimulation activity in Argentina, stronger North American rig activity along with ramped up drilling operations at offshore and onshore international resources. This was offset by lower contributions related to Digital & Integration from Europe/CIS/Africa.
Schlumberger Limited Price, Consensus and EPS Surprise
Schlumberger Limited price-consensus-eps-surprise-chart | Schlumberger Limited Quote
Like Schlumberger, another oilfield service major Halliburton Company (HAL - Free Report) reported in-line third-quarter earnings. However, Baker Hughes Company (BKR - Free Report) , a leading player in the same space, missed third-quarter earnings estimates.
Segmental Performance
Revenues in the Digital & Integration unit totaled $812 million, up 10% from the year-ago quarter’s levels. Pre-tax operating income of $284 million was up 42% year over year. The outperformance was owing to higher contributions from the Asset Performance Solutions (APS) projects. This was offset partially by a decline in contributions from Europe/CIS/Africa.
Revenues in the Reservoir Performance unit declined 2% year over year to $1,192 million. Pre-tax operating income was $190 million, surging 85% year over year. The upside in profit was led by a surge in stimulation activity in Argentina along with increased wireline evaluation activity in Guyana and Mexico.
Revenues in the Well Construction segment rose 24% from the year-earlier quarter’s levels to $2,273 million. Pre-tax operating income improved 99% year over year to $345 million. Stronger North American rig activity along with ramped up drilling operations at offshore and onshore international resources aided the uptick.
Revenues in the Production Systems segment amounted to $1,674 million, up 9% from the year-ago quarter’s numbers. Pre-tax operating income rose 26% from the prior-year quarter’s levels to $166 million. An increase in sales of well and surface production systems was responsible for the improvements. This was offset partially by lower sales related to midstream production systems.
Cash Flow
Despite the company’s $42 million of severance payments through the September quarter, the oilfield service firm generated free cash flow of $671 million.
Financials
Capital expenditures in the quarter were recorded at $273 million. As of Sep 30, 2021, the company had approximately $2,942 million in cash and short-term investments. It had long-term debt of $14,370 million at third quarter-end, representing a debt to capitalization of almost 53%.
Forward View
Schlumberger projects its 2021 capital investment at $1.6 billion. Last year, the figure was $1.5 billion. The company anticipates to complete this year with robust momentum and projects continued growth in the December quarter.
Fuel demand has improved drastically, so has oil price, thanks to the rolling out of coronavirus vaccines at a massive scale. The company expects this trend to continue for the next few years, which will drive upstream investment, especially in international resources. Being a leading player in the oilfield service space, the company expects to capitalize on improving demand for oilfield services.
Zacks Rank & Other Stock to Consider
The company carries a Zacks Rank #2 (Buy). Another prospective stock from the energy space is Whiting Petroleum Corporation , sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Whiting Petroleum has witnessed upward earnings estimate revisions for 2021 in the past 30 days.