The world’s largest oilfield services provider Schlumberger Ltd. (SLB) reported adjusted fourth-quarter 2014 earnings of $1.50 per share (excluding special items), beating the Zacks Consensus Estimate of $1.47.
The quarter’s bottom line increased by a penny from the prior-year quarter. The results were boosted by the company’s strong international exposure, focus on execution and its integration capabilities. However, the steep fall in the oil price, and the unrest in Libya and Iraq adversely impacted the results.
Full-year 2014 earnings from continuing operations were $5.57 a share, which were ahead of the Zacks Consensus Estimate of $5.55 and up from $4.75 earned last year.
During the quarter, income from continuing operations, excluding charges, was $1.94 billion, down about 0.4% year over year.
Fourth-quarter total revenue of $12.6 billion missed the Zacks Consensus Estimate of $12.7 billion but increased 6.2% from the year-ago level of $11.9 billion.
Total revenue for 2014 was $48.6 billion, reflecting an increase of 7.3% from the prior-year level of $45.3 billion. The top line for the year missed the Zacks Consensus Estimate of $48.7 billion by 0.2%.
Fourth-Quarter Highlights
Of the total revenue, International Area revenues were $8.2 billion while North America Area revenues were $4.3 billion.
All the three business segments – Reservoir Characterization Group, Drilling Group and Production Group – registered growth.
Reservoir Characterization Group: This segment posted revenues of $3.1 billion, down 6.4% year over year and 2.9% sequentially. Pre-tax operating income was $956 million, which decreased 7.8% year over year but increased 0.2% from the prior quarter.
Drilling Group: Revenues recorded by this group were $4.66 billion, which improved 4.9% year over year but decreased 3.4% sequentially. Pre-tax operating income was $966 million, up 9.8% year over year but down 7.6% sequentially.
Production Group: The revenues for this group climbed 17.4% year over year and 5.5% sequentially to $4.95 billion. Pre-tax operating income was $908 million, up 24.4% year over year and 6% sequentially.
Financials
As of Dec 31, 2014, the company had approximately $7.5 billion in cash and short-term investments and $10.6 billion in long-term debt. In the reported quarter, Schlumberger repurchased 12.1 million shares of its common stock at an average price of $90.22 per share. The total purchase price amounted to $1.1 billion.
Ranks
Schlumberger currently carries a Zacks Rank #5 (Strong Sell). Better-ranked stocks in the space include Enbridge Energy Management LLC (EEQ), Seadrill Partners LLC (SDLP) and Spectra Energy Partners, LP (SEP), each sporting a Zacks Rank #1 (Strong Buy).
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