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The Zacks Analyst Blog Highlights: Schlumberger, Halliburton, Transocean, BHP Billiton and Core Laboratories

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For Immediate Release

Chicago, IL - Oct 25, 2017 - Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Schlumberger Ltd. (SLB),Halliburton Co. (HAL),Transocean Ltd. (RIG),BHP Billiton Limited (BHP) andCore Laboratories N.V. (CLB).

Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.

Here are highlights from Tuesday's Analyst Blog:

Oil & Gas Stock Roundup: SLB, HAL, RIG and More

It was a week where both oil and gas prices logged gains.

On the news front, oilfield service majors Schlumberger Ltd. and Halliburton Co. kicked off the energy earnings season. Importantly, both companies indicated that activity in North America remain strong. Meanwhile, Swiss rig behemoth Transocean Ltd. received a new contract award for one of its ultra-deepwater drillships.

Overall, it was a good week for the sector. West Texas Intermediate (WTI) crude futures edged up about 0.8% to close at $51.84 per barrel, while natural gas prices gained 1.5% to $2.915 per million Btu (MMBtu). (See the last 'Oil & Gas Stock Roundup' here: RDS.A Buys EV Charging Network, CVX Cancels Australia Drilling Plan .)

The U.S. oil benchmark registered a modest climb after the U.S. Energy Department's inventory release showed that crude stockpiles fell for the fourth straight week.

The bullish impact from the crude inventory draw was supported by other developments including mounting tensions between Iraq and Kurdistan near the oil-rich city of Kirkuk, President Trump's decision not to certify Iran's compliance with the nuclear deal, and a falling U.S. rig count.

However, the gains were kept in check by concerns over a new wave of domestic shale oil production that continues to be the biggest headwind for the market.

Meanwhile, natural gas futures finished higher following an in-line increase in supplies. Current stocks - at 3.646 trillion cubic feet (Tcf) - are now 35 Bcf (1%) under the five-year average, while dropping 179 Bcf (4.7%) below the year-ago figure.

Recap of the Week's Most Important Stories

1. The world's largest oilfield services provider, Schlumberger Ltd., reported third-quarter 2017 earnings of 42 cents per share (excluding charges and credits), in line with the Zacks Consensus Estimate and higher than the year-ago figure of 25 cents.

The strong results were driven by solid demand for directional drilling in the North American land market. This was partially offset by major project completions in Mexico and Iraq, where the company wrapped up major service contracts.

The oilfield service player expects activity in North America - where Schlumberger has a significant client base - to continue growing but cautioned that the rate might slow down from previous quarters on account of flattening rig count.

As of Sep 30, 2017, the company had approximately $4,952 million in cash and short-term investments and $15,871 million in long-term debt. This represents a debt-to-capitalization ratio of 30%. In the July-to-September quarter, the company bought back 1.5 million shares. (Read more: Schlumberger Posts In-Line Q3 Earnings, Revenues Miss .)

2. Smaller rival Halliburton Co. reported better-than-expected third quarter profit thanks to improved utilization and pricing gains in North America - the company's largest market by sales. Halliburton's income from continuing operation came in at 42 cents per share, above the Zacks Consensus Estimate of 38 cents - the thirteenth consecutive quarterly outperformance. Moreover, revenues of $5,444 million beat the Zacks Consensus Estimate of $5,318.9 million.

Along the results, Halliburton also sounded optimistic in its view that the North American land market is improving rapidly, driven by increased utilization and pricing - particularly for pressure pumping. As it is, rig counts have generally been rising during the last one and half years since plunging to an all-time low of 404 in May 2016, with the addition of a flood of new units. As a proof of the recovery, Halliburton grew its domestic land revenue by 14% sequentially, well ahead of the U.S. land rig count growth of 6%.

Additionally, Halliburton's international market proved resilient in the face of challenging circumstances. The company's impressive expense management for the last several quarters helped regional sales rising more than 4% from the second quarter. (Read more North American Strength Drives Halliburton Q3 Earnings )

3. Offshore driller Transocean Ltd. recently reported that its ultra-deepwater drillship Deepwater Invictus has received a two-year contract from a subsidiary of mining company, BHP Billiton Limited . Per Transocean, the contract will begin in the second quarter of 2018.

The contract for Deepwater Invictus, which joined Transocean's fleet in 2014, includes three one-year priced options. Transocean expects the backlog related to the contract to be around $106 million. The Zacks Rank #3 (Hold) company is yet to declare the exact dayrates for the rig. In this context, we would like to remind investors that Deepwater Invictus' first contract with BHP in 2014 had a dayrates of $595,000. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .

Built in Korea's DSME shipyard, Invictus can operate in water depth of up to 12,000 feet. It can drill 40,000 feet deep wells. The drillship worked for BHP in the U.S. Gulf of Mexico and Trinidad. Invictus is presently in the Gulf of Mexico, south of Louisiana. (Read more Transocean's Deepwater Drillship Invictus Wins New Contract )

4. Oilfield services company Core Laboratories N.V. reported third-quarter 2017 adjusted earnings of 48 cents per share, surpassing the Zacks Consensus Estimate of 44 cents. The figure also compared favorably with the prior-year quarter adjusted earnings of 38 cents.

Although the company's operations in the third quarter were affected by Hurricanes Harvey, Irma and Maria, it surpassed its updated guidance. Damages to Core Laboratories' facilities were minor. Despite the unfavorable situations faced by the company and its clients due to flooding, power outages and wind damages caused by the hurricanes, its results were better than the year-ago quarter, thanks to the rising demand for the company's products.

As of Sep 30, 2017, Core Laboratories had cash and cash equivalents of $13.8 million and long-term debt (including lease obligations) of around $233.9 million. The debt-to-capitalization ratio of the company was 60.4%. Capital expenditures for the third quarter were $4.9 million.

Importantly, the company generated free cash flow of approximately $25 million in third-quarter 2017. (Read more Core Laboratories Q3 Earnings & Revenues Top Estimates )

Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1 Stock of the Day pick for free .

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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.

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BHP Billiton Limited (BHP): Free Stock Analysis Report

Schlumberger N.V. (SLB): Free Stock Analysis Report

Halliburton Company (HAL): Free Stock Analysis Report

Core Laboratories N.V. (CLB): Free Stock Analysis Report

Transocean Ltd. (RIG): 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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