The world’s largest oilfield services provider Schlumberger Ltd. SLB reported adjusted first-quarter 2015 earnings of 76 cents per share (excluding special items), which lagged the Zacks Consensus Estimate of 96 cents.
Also, the quarter’s results decreased from $1.21 per share earned in the year-earlier quarter. The results declined due to severe fall in North American land activity and related pricing pressures. International operations were affected by reduced customer spending along with seasonal effects in the Northern Hemisphere. The drop in the value of Russian ruble and Venezuelan bolivar also had an adverse effect on the results.
Income from continuing operations, excluding charges, was $1.36 billion, down 17% year over year.
Total revenue of $10.2 billion was down 8.8% from the year-earlier level of $11.2 billion.
First-Quarter Highlights
All groups – Reservoir Characterization, Drilling Group and Production Group – registered a year-over-year fall. Production Group revenues declined due to lower pressure pumping services in North America, while Reservoir Characterization and Drilling Group revenues fell as a result of a sharp fall in exploration-related services and development drilling activity. Product, software and multi-client sales also declined as customers further reduced exploration and discretionary spending.
Reservoir Characterization: This group posted revenues of $2.6 billion, down 14.4% from the prior-year quarter. Pre-tax operating income was $655 million, which decreased 17.3% year over year.
Drilling Group: This group recorded revenues of $4.0 billion, which fell 8.5% from the year-ago quarter. Pre-tax operating income was $790 million, down 10.3% year over year.
Production Group: Revenues recorded by this group were $3.8 billion, which declined 5.5% from the year-earlier quarter. Pre-tax operating income was $549 million, down 24.2% year over year.
Financials
As of Mar 31, 2015, the company had approximately $6.8 billion in cash and short-term investments and $8.9 billion in long-term debt. In the reported quarter, Schlumberger repurchased 8.7 million shares of its common stock at an average price of $82.98 for a total purchase price of $719 million.
Zacks Rank
Schlumberger currently carries a Zacks Rank #3 (Hold). Better-ranked stocks from the same space include Valero Energy Partners L.P. VLP, Western Gas Equity Partners, L.P WGP and Hallador Energy Company HNRG. All these stocks sport a Zacks Rank #1 (Strong Buy).
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