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Diving deeper into Schlumberger’s 3Q14 earnings

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Operating income increased in 3Q14

Schlumberger Limited’s (SLB) pre-tax operating income increased 12% to $2.8 billion in 3Q14, from $2.5 billion in 3Q13. Most of the growth in operating income came from growth in international and North American operations.

Income from continuing operations increased 14% to $1.9 billion in 3Q14, from $1.7 billion in 3Q13. Income from continuing operations is net income excluding loss from discontinued operations.

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What boosted quarterly performance

Improved North American operations led by higher onshore activity and east coast offshore activity drove the company’s performance. Schlumberger also experienced better international operations this quarter, led by a turnaround in its Latin American operations, particularly in Mexico and Argentina.

In Africa, the company witnessed busier exploration activities in Angola, Congo, and New Guinea. Its Russian operations, too, increased as a result of a seasonal rebound.

Where quarterly margins stymied

Schlumberger ’s performance faced headwinds in northern Iraq and India in Asia, and Norway in Europe.

Schlumberger is a component of the VanEck Vectors Oil Services ETF (OIH) and the Energy Select Sector SPDR (XLE). Other companies in OIH include Halliburton Company (HAL) and Baker Hughes Incorporated (BHI).

Year-to-date revenues and earnings up

For the nine months ended September 30, 2014, Schlumberger ’s revenues went up by 7.7% to $35.93 billion. For the same nine months of 2013, the company recorded $33.36 billion.

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Net income for this period went up by ~1.3%, from $5.07 billion to $5.14 billion. Earnings per share increased to $3.91 year-to-date, from $3.79 in 2013. The company’s 2014 performance improved due to 15% and 12% higher revenues from its respective North American, and Middle East and Asian operations.

Did all of Schlumberger ’s product groups and geographic segments move during its latest quarter? Read the next article to find out.

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