How Will the Rig Count Affect Schlumberger in 2Q16?

In the past one year, Schlumberger’s (SLB) North America revenue share has come down. In 1Q16, SLB’s revenue from North America fell to 22% of its total revenues compared to 32% in 1Q15. In comparison, Halliburton’s (HAL) 1Q16 revenues from North America fell 49% over 1Q15. SLB makes up only 1.2% of the iShares S&P 500 Value ETF (IVE). The energy sector makes up 13.2% of IVE.

In the past one year through 1Q16, the US rig count has fallen 56%. During this period, the international rig count fell only 21%.

From March 31 to June 30, the US rig count further fell by 9% while the international rig count fell 3% during the same period. Lower rig count is expected to hurt SLB’s revenues and earnings in 2Q16.

Next, we’ll discuss Schlumberger’s growth drivers.