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The Zacks Analyst Blog Highlights: Schlumberger, Halliburton, Transocean, ConocoPhillips and Chevron
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For Immediate Release
Chicago, IL – July 25, 2018 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Schlumberger (SLB - Free Report) , Halliburton (HAL - Free Report) , Transocean Ltd. (RIG - Free Report) , ConocoPhillips (COP - Free Report) and Chevron (CVX - Free Report) .
Oil & Gas Stock Roundup, Q2 Earnings: SLB, HAL & More
It was a week where oil prices tilted lower but natural gas futures ended modestly up.
On the news front, oilfield service majors Schlumberger, Halliburton and Baker Hughes kicked off the second-quarter energy earnings season.
Overall, it was a mixed week for the sector. While West Texas Intermediate (WTI) crude futures lost 0.8% to close at $70.46 per barrel, natural gas prices edged up 0.2% to $2.757 per million Btu (MMBtu). (See the last ‘Oil & Gas Stock Roundup’ here: COP, APC, OXY Boosting Shareholders' Wealth)
The U.S. crude benchmark slipped for the third week in a row on growing concerns about oversupply and tepid demand amid escalating trade conflict between the world’s biggest oil consumers - the United States and China. The U.S. Energy Department's inventory release showing a shock weekly build in crude stockpiles triggered by record domestic output also played spoilsport.
Meanwhile, natural gas prices moved a tad higher last week following a smaller-than-expected increase in supplies.
Recap of the Week’s Most Important Stories
1. The world’s largest oilfield services provider, Schlumberger, reported second-quarter 2018 earnings of 43 cents per share (eliminating charges and credits) – just beating the Zacks Consensus Estimate of 42 cents. The bottom line also rose from the year-earlier figure of 35 cents.
The results were driven by a rebound in drilling activities in Russia and the North Sea. Higher demand for directional drilling techniques, especially in the domestic onshore market, supported the numbers. However, it was partially offset by increased costs related to the mobilization of resources for new projects internationally.
As of Jun 30, 2018, Schlumberger had approximately $3,049 million in cash and short-term investments and $13,865 million in long-term debt. This represents a debt-to-capitalization ratio of 27.3%. In the April-to-June quarter, the company bought back 1.5 million shares. For 2018, the company still projects investments of $2 billion, almost in line with the 2017 and 2016 figures.
2. Smaller rival Halliburton reported slightly lower-than-expected second quarter profit after robust North American land drilling activity on the back of oil pricing strength were more than offset by reduced pressure pumping services in the Middle East, decreases in completion tool sales in Europe/Africa/CIS and decline in Gulf of Mexico drilling activity.
Halliburton’s capital expenditure in the second quarter was $565 million. As of Jun 30, 2018, the company had approximately $2,058 million in cash/cash equivalents and $10,427 million in long-term debt, representing a debt-to-capitalization ratio of 54.1%.
However, Halliburton shares slumped more than 8% after the company warned that a slowdown in the oil and gas rich-Permian Basin activity due to pipeline constraints will be a drag on third quarter earnings. (Read more Halliburton Posts Q2 Earnings Miss, Sales Surpass)
3. Baker Hughes reported second-quarter 2018 adjusted earnings of 10 cents per share, missing the Zacks Consensus Estimate of 13 cents owing to drop in volumes of contractual activities and Subsea Services. This was partially negated by increased pressure pumping activities and contributions from Inspection Technologies.
Total orders from all business segments through second-quarter 2018 came in at roughly $6 billion, up 9% year over year. Oilfield Services and Oilfield Equipment business units contributed to roughly $2.9 billion and $1 billion orders, respectively.
The company foresees higher activities in the several international markets. Baker Hughes also expects higher growth in the coming quarters which will likely be backed by rising rig count and operating wells in North America. (Read more Baker Hughes Q2 Earnings Miss, Orders Increase Y/Y)
4. Transocean Ltd. recently announced that it has won contracts for two of its semi-submersibles – Transocean 712 and GSF Development Driller I. The company expects to add a total of $233 million to its backlog from these two contracts.
This midwater rig received a 13-well contract from ConocoPhillips, which is expected to last for 580 days. The deal is expected to add around $75 million to Transocean’s backlog. The contract, to be carried out in the U.K. North Sea, is expected to start off in March 2019. Moreover, the deal incorporates a one-well option.
This ultra-deepwater semisubmersible won an 11-well contract from the Australian unit of Chevron, which is expected to last for 955 days. The deal is expected to add around $158 million to Transocean’s backlog. The location for the contract, which is expected to begin in the first half of 2019, will be off the coast of Australia. The deal also incorporates four one-well options. (Read Transocean Wins New Contracts for 2 Semi-Submersibles)
Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.
Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.
Strong Stocks that Should Be in the News
Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has nearly tripled the market from 1988 through 2015. Its average gain has been a stellar +26% per year. See these high-potential stocks free >>.
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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The Zacks Analyst Blog Highlights: Schlumberger, Halliburton, Transocean, ConocoPhillips and Chevron
For Immediate Release
Chicago, IL – July 25, 2018 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Schlumberger (SLB - Free Report) , Halliburton (HAL - Free Report) , Transocean Ltd. (RIG - Free Report) , ConocoPhillips (COP - Free Report) and Chevron (CVX - Free Report) .
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
Here are highlights from Tuesday’s Analyst Blog:
Oil & Gas Stock Roundup, Q2 Earnings: SLB, HAL & More
It was a week where oil prices tilted lower but natural gas futures ended modestly up.
On the news front, oilfield service majors Schlumberger, Halliburton and Baker Hughes kicked off the second-quarter energy earnings season.
Overall, it was a mixed week for the sector. While West Texas Intermediate (WTI) crude futures lost 0.8% to close at $70.46 per barrel, natural gas prices edged up 0.2% to $2.757 per million Btu (MMBtu). (See the last ‘Oil & Gas Stock Roundup’ here: COP, APC, OXY Boosting Shareholders' Wealth)
The U.S. crude benchmark slipped for the third week in a row on growing concerns about oversupply and tepid demand amid escalating trade conflict between the world’s biggest oil consumers - the United States and China. The U.S. Energy Department's inventory release showing a shock weekly build in crude stockpiles triggered by record domestic output also played spoilsport.
Meanwhile, natural gas prices moved a tad higher last week following a smaller-than-expected increase in supplies.
Recap of the Week’s Most Important Stories
1. The world’s largest oilfield services provider, Schlumberger, reported second-quarter 2018 earnings of 43 cents per share (eliminating charges and credits) – just beating the Zacks Consensus Estimate of 42 cents. The bottom line also rose from the year-earlier figure of 35 cents.
The results were driven by a rebound in drilling activities in Russia and the North Sea. Higher demand for directional drilling techniques, especially in the domestic onshore market, supported the numbers. However, it was partially offset by increased costs related to the mobilization of resources for new projects internationally.
As of Jun 30, 2018, Schlumberger had approximately $3,049 million in cash and short-term investments and $13,865 million in long-term debt. This represents a debt-to-capitalization ratio of 27.3%. In the April-to-June quarter, the company bought back 1.5 million shares. For 2018, the company still projects investments of $2 billion, almost in line with the 2017 and 2016 figures.
On a positive note, Schlumberger said that it expects an uptick in offshore activity triggered by higher anticipated spending by explorers. (Read more Schlumberger Q2 Earnings Beat, Revenues Miss Estimates)
2. Smaller rival Halliburton reported slightly lower-than-expected second quarter profit after robust North American land drilling activity on the back of oil pricing strength were more than offset by reduced pressure pumping services in the Middle East, decreases in completion tool sales in Europe/Africa/CIS and decline in Gulf of Mexico drilling activity.
Halliburton’s capital expenditure in the second quarter was $565 million. As of Jun 30, 2018, the company had approximately $2,058 million in cash/cash equivalents and $10,427 million in long-term debt, representing a debt-to-capitalization ratio of 54.1%.
However, Halliburton shares slumped more than 8% after the company warned that a slowdown in the oil and gas rich-Permian Basin activity due to pipeline constraints will be a drag on third quarter earnings. (Read more Halliburton Posts Q2 Earnings Miss, Sales Surpass)
3. Baker Hughes reported second-quarter 2018 adjusted earnings of 10 cents per share, missing the Zacks Consensus Estimate of 13 cents owing to drop in volumes of contractual activities and Subsea Services. This was partially negated by increased pressure pumping activities and contributions from Inspection Technologies.
Total orders from all business segments through second-quarter 2018 came in at roughly $6 billion, up 9% year over year. Oilfield Services and Oilfield Equipment business units contributed to roughly $2.9 billion and $1 billion orders, respectively.
The company foresees higher activities in the several international markets. Baker Hughes also expects higher growth in the coming quarters which will likely be backed by rising rig count and operating wells in North America. (Read more Baker Hughes Q2 Earnings Miss, Orders Increase Y/Y)
4. Transocean Ltd. recently announced that it has won contracts for two of its semi-submersibles – Transocean 712 and GSF Development Driller I. The company expects to add a total of $233 million to its backlog from these two contracts.
This midwater rig received a 13-well contract from ConocoPhillips, which is expected to last for 580 days. The deal is expected to add around $75 million to Transocean’s backlog. The contract, to be carried out in the U.K. North Sea, is expected to start off in March 2019. Moreover, the deal incorporates a one-well option.
This ultra-deepwater semisubmersible won an 11-well contract from the Australian unit of Chevron, which is expected to last for 955 days. The deal is expected to add around $158 million to Transocean’s backlog. The location for the contract, which is expected to begin in the first half of 2019, will be off the coast of Australia. The deal also incorporates four one-well options. (Read Transocean Wins New Contracts for 2 Semi-Submersibles)
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1 Stock of the Day pick for free.
About Zacks Equity Research
Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.
Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.
Strong Stocks that Should Be in the News
Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has nearly tripled the market from 1988 through 2015. Its average gain has been a stellar +26% per year. See these high-potential stocks free >>.
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.