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Schlumberger Q2 Earnings Beat; Down Y/Y on Weak Activity - Analyst Blog

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The world's largest oilfield services provider Schlumberger Ltd.SLB reported adjusted second-quarter 2015 earnings of 88 cents per share (excluding special items), which came above the Zacks Consensus Estimate of 79 cents.

However, the quarter's results decreased from $1.37 per share earned in the year-earlier quarter. The decline stemmed from a severe fall in North American land activity and related pricing pressures. International operations were affected by reduced customer spending along with customer budget cuts and pricing concessions.

Schlumberger Ltd. - Earnings Surprise | FindTheCompany

Total revenue of $9.0 billion was down 25% from the year-earlier level of $12.1 billion. This also came below the Zacks Consensus Estimate of $9.1 billion.

Second-Quarter Highlights

All groups - Reservoir Characterization, Drilling Group and Production Group - registered year-over-year fall in revenues. 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 spent lesser on exploration and discretionary items.

Reservoir Characterization: This group posted revenues of $2.4 billion, down 25% from the prior-year quarter. Pre-tax operating income was $642 million, which decreased 31% year over year.

Drilling Group: This group recorded revenues of $3.5 billion, which fell 25% from the year-ago quarter. Pre-tax operating income was $685 million, down 30% year over year.

Production Group: Revenues recorded by this group were $3.1 billion, which declined 26% from the year-earlier quarter. Pre-tax operating income was $397 million, down 44% year over year.

Financials

As of Jun 30, 2015, the company had approximately $7.3 billion in cash and short-term investments and $9.1 billion in long-term debt. In the reported quarter, Schlumberger repurchased 5.8 million shares of its common stock at an average price of $90.01 for a total purchase price of $520 million.

Zacks Rank

Schlumberger currently carries a Zacks Rank #3 (Hold). Better-ranked stocks from the same space include Enbridge Energy Partners L.P. EEP , EQT Midstream Partners L.P. EQM and Cheniere Energy, Inc. LNG , sporting a Zacks Rank #1 (Strong Buy).

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SCHLUMBERGER LT (SLB): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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