Schlumberger Will Weather Slump Better Than Other Oil-Service Stocks

This article was originally published by TheStreet on December 9, 2014.

By Sarfaraz A. Khan

NEW YORK (TheStreet) -- The oilfield-services stocks are likely to bear the brunt of plummeting crude prices, but Schlumberger (SLB) , which generates more annual revenue than any other company in this space, is in a strong position to weather the storm.

This is due, in part, to the Houston, Texas-based company's financial health, large geographic footprint and the changing industry dynamics related to Halliburton's (HAL) acquisition of Baker Hughes (BHI) .

Schlumberger Will Weather Slump Better Than Other Oil-Service Stocks

This article was first published by TheStreet on December 09, 2014 

By Sarfaraz A. Khan.

NEW YORK (TheStreet) -- The oilfield-services stocks are likely to bear the brunt of plummeting crude prices, but Schlumberger (SLB) , which generates more annual revenue than any other company in this space, is in a strong position to weather the storm.

This is due, in part, to the Houston, Texas-based company's financial health, large geographic footprint and the changing industry dynamics related to Halliburton's (HAL) acquisition of Baker Hughes (BHI) .

Chevron, Schlumberger the Early-Bird Winners of Mexico’s Oil Reforms

This article was first published by TheStreet on August 30, 2014

By Sarfaraz A. Khan

Thanks to landmark oil industry reforms, Mexico is gearing up to explore its undeveloped deepwater oil reserves, which could hold roughly twice as much oil as the nation's existing proven reserves.

This could open doors to new business opportunities for Chevron (CVX_) and Schlumberger (SLB_) which could become the earliest and the biggest beneficiaries of the oil reforms.

Since 1938, Mexico's oil and gas reserves have been off-limits to foreign companies. However, earlier this month Mexico's President Enrique Pena Nieto signed into law changes that end the 75-year-old monopoly of the government-owned energy behemoth Pemex on the country's enormous 13.5 billion barrels of oil reserves while opening up the nation's energy sector to foreign investors.

Buy Schlumberger on the Dip; Don't Worry About Iraq, Russia Exposure

This article was originally published by TheStreet on August 18, 2014

NEW YORK (TheStreet) -- Shares of the world's biggest oilfield services provider Schlumberger (SLB_) fell by 2.4% from last Tuesday to Friday due to mounting fears that the company could be the latest victim of the crises in Ukraine and Iraq. This, however, could be a buying opportunity for investors as the market have overreacted. Shares have recovered a bit since then -- up 1.6% Monday to $108.26 as of 1:45 p.m. -- but this is still a stock to buy on the dips.

This is because Schlumberger does not generate a significant portion of its total revenues from any single country outside of North America. Therefore, it is unlikely that the problems in Iraq or Russia will seriously damage the company's bottom line. The charges related to the Russian sanctions represent less than 2% of Schlumberger's earnings estimate for this quarter. Iraq's impact on the company's profits is even smaller.

Schlumberger Is Going Where No Oilfield Service Company Will Tread

This article was originally published by TheStreet on April 30, 2014

By Sarfaraz A. Khan. Research Assistant: Gohar Yousuf

NEW YORK (TheStreet) - Oilfield-services titan Schlumberger (SLB_) is targeting growth even as the biggest oil companies are cutting back on their spending.

In its recent quarterly results, Schlumberger's first-quarter revenue came up short of analysts' estimates, but the company delivered on earnings. The company's competitive advantage lies in its large global footprint which remains unparalleled in the industry.

This advantage fueled the company's overall margin expansion despite weakness in North America. The same advantage could drive Schlumberger's growth in the coming years as state-owned oil companies continue to spend billions of dollars even as oil majors cut back on capital spending.

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. 

Schlumberger’s Competitive Advantage Will Drive Double-Digit Earnings Growth

By Sarfaraz A. Khan and Gohar Yousuf

Schlumberger’s (NYSE:SLB) size, exposure to the international markets and technological capabilities gives it a competitive advantage that would translate into double digit EPS growth. 

The world’s leading oilfield services firm, Schlumberger (SLB), continues to grow in the international and North American markets. The company has managed to increase its market share and has, once again, beaten the market’s expectations in its quarterly results, for the eighth time in a row. Unlike some of its other rivals, Schlumberger is truly a global player with significant representation in the international markets. The company is now eyeing increasing demand from the Middle East and Asia, particularly Saudi Arabia and Iraq. 

Strong Results

In its previous quarterly results, Schlumberger reported revenue growth of 10.6% from last year to $11.61 billion while its earnings rose 20% to $1.71 billion, or $1.29 per share. The business managed to beat both top and bottom line consensus estimates by $30 million and $0.05 per share, respectively. The strong results came on the back of an impressive performance in the … read full article at GuruFocus.

 

Mexican Reforms: Time To Buy These Oilfield Services Titans

From Seeking Alpha

Mexico is gearing up for some significant oil reforms in an effort to revive its economy in general and its oil and gas sector in particular. The country's energy sector has been dominated by Petróleos Mexicanos, also known as Pemex. With the new reforms, one of the world's most restrictive energy markets could open its doors to international energy firms. The oilfield services firms Schlumberger (NYSE:SLB) and Halliburton (NYSE:HAL) could be the first to capitalize on this development. The two were already eyeing more than $8 billion worth of large integrated projects in Mexico. Analysts believe that now is the time to buy Schlumberger and Halliburton on these new developments. The new price targets on these firms represent a 30% upside.

Declining Output

The state-owned energy behemoth Pemex has been operating as a monopoly for seven decades. The business has worked under service contracts with foreign firms, as opposed to profit-sharing contracts. The absence of profit or production sharing contracts has kept most foreign energy firms at bay. The country's energy sector has suffered with falling levels of output due to a lack of investment. In the last ten years, Pemex increased its annual investment by five-fold to $20 billion, but its production fell from 3.59 million barrels per day in 2002 to 2.93 million barrels per day in 2012.

The oil reforms could bring an energy revival to the country which holds15 billion barrels of oil (as much as Kuwait) and could be home to …. Read More

This Oilfield-Services Titan Stands Out From the Crowd

From  The Motley Fool

Oilfield-services titan Schlumberger (NYSE: SLB) recently released its quarterly results, in which it beat both revenue and income estimates while significantly increasing its buyback program. Analysts at Global Hunter have identified that the company could deliver solid earnings of more than $6 per share by 2014, up from the current $4.59 per share. Its competitive advantage lies in its global footprint and technological prowess.The industry outlook is also looking bright as Schlumberger is expecting a “double-digit” uptake in customer spending on oil exploration. 

Sector review

The strong performance was attributed to more deep-water drilling. Schlumberger reported an 8.1% increase in quarterly revenue to $11.2 billion, $30 million above consensus, which translated into EPS of $1.15 per share, $0.04 above estimates. The international segment outperformed the North American units; the former registered sales growth of 8%, while the latter saw a 2% increase. Unlike its rivals Halliburton (NYSE: HAL) and Baker Hughes (NYSE:BHI), Schlumberger earns about two-thirds of its revenue from outside of the U.S and Canada.

Schlumberger’s closest rival, Halliburton, also

How a Drop in This Commodity's Price Will Improve Halliburton's Margins

From The Motley Fool

The price of guar gum, one of the primary ingredients used by the oil and gas service industry giants, such as Halliburton (NYSE: HAL) and Schlumberger (NYSE: SLB) in hydraulic fracturing (or fracking) for shale gas, has fallen considerably this year. This is going to improve the margins of these companies and could even cause an increase in earnings, particularly for Halliburton, which dominates the North American market.