Schlumberger beats by $0.03, reports revs in-line
Reports Q3 (Sep) earnings of $1.49 per share, $0.03 better than the Capital IQ Consensus Estimate of $1.46; revenues rose 8.5% year/year to $12.6 bln vs the $12.63 bln consensus.
"Strong activity in North America and robust growth in International Areas, led by Latin America and supported by Europe/Africa/CIS in spite of international sanctions in Russia, drove third-quarter results to a new record high. At the same time, Middle East & Asia proved highly resilient in the face of significant headwinds in Northern Iraq. All Areas and all Groups recorded growth, backed by new technology penetration and strong operational execution."
"While market sentiments are currently driven by fear of short-term over-supply, and although the oil demand outlook has been revised slightly downwards, we see little reason at the present time to change our view that the challenges of maintaining non-OPEC supply outside North America, the lack of growth in OPEC sustainable production capacity maintaining tightness in OPEC spare capacity, and the continuing geopolitical risks in some key producing regions all lead to a supply-demand situation that is relatively well-balanced."
"Strong activity in North America and robust growth in International Areas, led by Latin America and supported by Europe/Africa/CIS in spite of international sanctions in Russia, drove third-quarter results to a new record high. At the same time, Middle East & Asia proved highly resilient in the face of significant headwinds in Northern Iraq. All Areas and all Groups recorded growth, backed by new technology penetration and strong operational execution."
"While market sentiments are currently driven by fear of short-term over-supply, and although the oil demand outlook has been revised slightly downwards, we see little reason at the present time to change our view that the challenges of maintaining non-OPEC supply outside North America, the lack of growth in OPEC sustainable production capacity maintaining tightness in OPEC spare capacity, and the continuing geopolitical risks in some key producing regions all lead to a supply-demand situation that is relatively well-balanced."
>>> Schlumberger on conf cal
- Drilling Group revenue was $4.8 bln in the quarter and increased 3.6%.
- Margins improved by 60 basis points to 21.7%. These increases were largely attributable to robust drilling and measurement activity in the offshore North America, Latin America the strong IPM activity in Mexico. The second quarter acquisition also contribute to the revenue growth.
- Production Group revenue of $4.7 bln increased 8.1%.
- This growth was led by well services largely as a result of the rebound from the spring break-up in Canada and strong performance on U.S. plants.
- The co's international business posted strong results again in Q3 with a sequential increase in revenue and with pretax operating margin expanding 55 basis points to 24.6%, which is the highest level seen in five years in spite of the geopolitical headwinds experienced in Russia northern Iraq and Libya.
- In terms of pricing, the international market remains highly competitive for basic services and the company sees no sign of any general pricing inflection.
- However, the co continues to be able to drive effective pricing for new technology together continues growth in integration performance-based contracts this combination puts it in a very strong compared a position which it continues to leverage to drive market share gains and expand operating margins.