Share price up on earnings
Schlumberger (SLB) released its financial information for 1Q15 on January 15, 2015. The company’s stock reacted mildly positively immediately following the earnings release. Since then, Schlumberger’s share price has gone up.
On the day after the earnings release, Schlumberger’s share price increased by 1% to $92.86 from $91.89 on the previous day. The share price has risen ~8% since January 1.
Many other major oilfield service and equipment providers’ share prices have also increased since the beginning of 2015. Shares of Halliburton (HAL) have rallied 19%, while those of Baker Hughes (BHI) has gone up 19% as well. The share price for Weatherford International (WFT) followed closely with an 18% rise. All of these companies are components of the VanEck Vectors Oil Services ETF (OIH). OIH has increased 4% during the same period.
Quarterly adjusted revenues
Between 4Q12 and 1Q15, Schlumberger’s adjusted revenues have decreased 8%. From 1Q14 to 1Q15, adjusted revenues fell 9%.
As noted in the graph above, Schlumberger’s adjusted revenues nearly matched estimates in most of the last ten quarters. In 1Q15, however, adjusted revenues fell short of estimates by ~2%.
The 2Q15 consensus sell-side analysts’ adjusted revenues estimate for Schlumberger (SLB) is $9.54 billion. This is ~7% lower than the $10.25 billion it recorded in 1Q15.
Between 4Q12 and 1Q15, Schlumberger’s adjusted earnings per share (or EPS) decreased ~2%. EPS decreased ~12% from 1Q14 to 1Q15.
As shown in the graph above, Schlumberger’s adjusted EPS had exceeded consensus estimates in most of the last ten quarters. On average, adjusted EPS surpassed consensus EPS by ~3.4% during the last ten quarters. In 1Q15, adjusted EPS was 19% higher than consensus EPS.
The 2Q15 consensus sell-side analysts’ adjusted EPS estimate for Schlumberger is ~$0.74, which is 30% lower than the $1.06 per adjusted share in 1Q15. Lower exploration and production spending across the upstream industry likely led to lower estimates.
In the next part of this series, we will discuss SLB’s 1Q15 earnings at greater length.