The world's largest oilfield services provider
) expects its first-quarter 2014 earnings per share (EPS) to be
higher year over year. The bullishness of the company stems from
higher market share and an improving cost structure.
The company in a smart move targeted state-owned and
independent energy companies that are spending significantly to
develop shale and other resources around the world, rather than
multinational energy companies, most of which are cutting
In the fourth quarter, the company's earnings of $1.35 per
share increased approximately 30% year over year from $1.04. The
results were boosted by the company's strong international
exposure and focus on execution and integration capabilities.
Also, the results were ahead of the Zacks Consensus Estimate of
Looking forward, Schlumberger's optimism on rising rig count
activity will likely lead to increased international spending on
exploration, higher production and stepped up activity in the
U.S. Gulf of Mexico. The company also expects steady growth in
the key regions of Sub-Sahara Africa, Russia, the Middle East,
China and Australia.
Schlumberger generates about two-thirds of its revenues
internationally, marking the highest ratio among the biggest
oilfield service providers, which includes
). Schlumberger's strength also lies in effective implementation,
strong contracts and new technologies.
The oilfield services behemoth believes that strong leverage
to the deepwater segment will help it to perform well over the
coming years. While the company makes most of its money outside
North America, it bears the brunt of industry-wide weakness in
U.S. hydraulic fracturing services as well as softness in the
land coiled-tubing business.
Schlumberger currently carries a Zacks Rank #3 (Hold),
implying that it is expected to perform in line with the broader
U.S. equity market over the next one to three months.
Meanwhile, one can consider better-ranked players in the
energy sector like
Helmerich & Payne Inc.
Patterson-uti Energy Inc.
). All the stocks sport a Zacks Rank #1 (Strong Buy).
HALLIBURTON CO (HAL): Free Stock Analysis
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SCHLUMBERGER LT (SLB): Free Stock Analysis
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