Monday, March 10, 2014

Schlumberger’s Competitive Advantage Will Continue To Fuel Its Growth

This article was originally published by GuruFocus

By Sarfaraz A. Khan and Gohar Yousuf

March 10, 2014
Since the beginning of the current week, the shares of the world’s leading oilfield services firm Schlumberger (SLB) have risen by 2.7% on the back of a “Strong Buy” rating from Raymond James. The income of the oilfield services titan could benefit from favorable prices in pressure pumping industry caused by an upsurge in demand for fracking services following an increase in natural gas prices.

This positive commentary follows an upgrade from Credit Suisse earlier in January after the company released its quarterly results for the fourth quarter of fiscal 2013. The company posted significant growth in earnings due to a solid performance in the international markets, particularly the Middle East and Asia. The company has been growing on the back of increasing demand from oil companies that have been hunting for resources in the remote corners of the world.

Earnings Beat

In the final quarter of the previous fiscal year, Schlumberger reported a massive 22.2% year-over-year increase in net income to $1.66 billion, or $1.26 per share. This translated into adjusted earnings of $1.35 per share, an increase from $1.04 per share in the same quarter of 2012. 

On the other hand, analysts were expecting profit of $1.32 per share.

Meanwhile, the company’s revenues rose 7.4% from a year ago to $11.91 billion which was slightly lower than markets’ expectations of $11.99 billion.

In short, the company managed to beat earnings, but missed revenue estimates.
However, a long-term analysis shows that Schlumberger continues to …. Read full article at GuruFocus