Schlumberger
Limited
NYSE:
SLB
COMPANY DESCRIPTION
Schlumberger engages in the
provision of technology for reservoir characterization, drilling, production,
and processing to the oil and gas industry. It operates through the following
business segments: Reservoir Characterization, Drilling, Production, Cameron,
and Elimination and Other. The Reservoir Characterization Group segment
consists of the principal technologies involved in finding and defining
hydrocarbon resources. The Drilling Group segment includes the drilling and
positioning of oil and gas wells such as bits and drilling tolls, drilling and
measurement, land rigs, and integrated drilling services. The Production Group
segment provides technologies in the lifetime production of oil and gas
reservoirs such as well services, completions, artificial lift, well
intervention, water service, integrated production services and others. The
Cameron Group segment consists of the pressure and flow control for drilling
and intervention rigs, oil and gas wells and production facilities. The company
was founded by Conrad Schlumberger and Marcel Schlumberger in 1926 and is
headquartered in Houston, TX.
RECOMMENDATION
We rate Schlumberger Ltd. a Buy at USD63. Below are the basic reasons to
recommend this stock as a Buy.
·
Schlumberger is the largest oilfield services
player in the world with presence in every energy market across the world.
Also, in all the operating business segments, the company is among the top
players. Given the huge size and attractive reservoir and well technologies,
the company will likely outperform peers.
·
The firm has a strong commitment of returning
cash back to the shareholders through dividend payments and stock repurchases.
Over the past 15 years, Schlumberger has been paying higher dividend yield than
the collective yield of the stocks belonging to the industry. Also, through
second-quarter 2018, the firm bought back 1.5 million shares of its common
stock.
·
We appreciate the company’s greater reliance on
lucrative international market. Being the leading provider of technology for
complex oilfield projects, Schlumberger is better positioned than most peers to
take up new offshore projects in the shallow water basins outside North
America. In fact, the company is expecting more exploration and drilling
activities to ramp up in the offshore resources, that will meet the growing
demand for crude in the world.
·
Schlumberger is consistently enhancing capacity
in the North American land market, comprising services to hydraulic fracturing
and drilling operations. Of late, customers are seeking to sand delivery and
services related production separately. Many oilfield services players fail to
be competent enough in both the spaces. Through ownership in sand mines,
Schlumberger has the potential to beat other players in standalone sand
allocation works. Thus, through both sand allocation and production services,
the company has been generating cash flow to its full potential.
LAST EARNINGS
Schlumberger’s
second-quarter 2018 earnings of 43 cents per share (excluding charges and
credits) beat the Consensus Estimate of 42 cents and improved from the year-ago
quarter’s figure of 35 cents.
The company posted total revenues
of $8,303 million, which improved from $7,462 million in the prior-year
quarter. However, the figure lagged the Consensus Estimate of $8,337 million.
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.
SALES/REVENUE HISTORY FOR LAST THREE YEARS
2015 35.48B
2016 27.81B
2017 30.44B
DIVIDEND HISTORY OF Schlumberger
09/01/2017 $0.50
11/30/2015 $0.50
08/31/2015 $0.50
06/01/2015 $0.50
02/09/2015 $0.50
12/01/2014 $0.40
08/29/2014 $0.40
06/02/2014 $0.40
Disclaimer:
Views are strictly personal. This Interim Financial Results & News posts or updates includes forecasts, projections and other predictive statements that represent Vtrade's assumptions and expectations in light of currently available information. These forecasts, etc., are based on industry trends, circumstances involving companies and other factors, and they involve risks, variables and uncertainties. The Group’s actual performance results may differ from those projected in these Interim Financial Results. Consequently, no guarantee is presented or implied as to the accuracy of specific forecasts, projections or predictive statements contained herein.
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