Top 5 Oilfield Stocks: Expected Earnings per Share Growth
National Oilwell Varco
National Oilwell Varco (NOV) could see ~44% EPS growth between 2Q17 and 3Q17. Its Rig Aftermarket segment’s revenue and margin are expected to grow in 3Q17, while its Completion & Production Solutions segment’s onshore margins are expected to contract due to a high percentage of lower-margin products and adverse movements in foreign exchanges. The company also expects deterioration in its offshore production-oriented businesses. For more on the company, read What Lies Ahead for National Oilwell Varco in 2017.
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Halliburton’s expected earnings growth in 3Q17
Halliburton (HAL) is expected to post a significant improvement in its adjusted net earnings in 3Q17. Analysts expect its adjusted EPS (earnings per share) to be $0.37 in 3Q17, versus $0.27 in 2Q17. The company’s higher earnings are expected to be higher due to robust North America revenue growth in 3Q17, a strong Completion & Production operating margin, and a consistent Drilling & Evaluation operating margin. HAL makes up 0.17% of SPDR S&P 500 ETF (SPY). SPY has risen 17% in the past year, whereas HAL has risen 3%. For more, read Will the International Slowdown Hurt Halliburton in 2017? The S&P 500 (SPX-INDEX) has risen 17% in the past year.
Schlumberger’s expected EPS growth in 3Q17
Schlumberger (SLB), the largest US OFS (oilfield service) company, is expected to register ~20% earnings growth between 2Q17 and 3Q17. Strong US onshore activity is expected to benefit SLB’s hydraulic fracturing activity in 3Q17, and Russia and the Gulf countries are improving the company’s outlook. In comparison, sell-side analysts expect U.S. Silica Holdings’ (SLCA) earnings to grow 29%, and Oceaneering International’s (OII) to grow 40%. Next, we’ll discuss the five OFS companies expected to see the steepest fall in EPS in 3Q17.