uploads///International Rev Share

Will the International Rig Count Impact Schlumberger in 4Q16?

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Jan. 4 2017, Updated 1:35 p.m. ET

Schlumberger’s revenue from international operations

In 3Q16, Schlumberger’s (SLB) revenue share generated outside the United States rose to 76.0% of its total revenues compared to 73.0% in 3Q15. By comparison, Halliburton’s (HAL) revenues from its international operations at the end of 3Q16 rose to ~57.0% of its total revenues compared to 55.0% a year ago.

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International rig count

From September to November 2016, the international rig count fell 1.0%. A lower international rig count could cause SLB’s revenues and earnings to fall in 4Q16.

SLB makes up 0.53% of the iShares Dow Jones US (IYY). The energy sector makes up 7.1% of IYY. Baker Hughes (BHI), which has entered into an agreement with General Electric (GE) to form a partnership, could benefit from increased international exposure. For more information, read Market Realist’s Can the BHI–GE Partnership Benefit from Global Growth?

By September 30, 2016, the international rig count had fallen 18.0% compared to a year ago. The fall was less than the US rig count, as we saw in the previous part of this series.

Next, let’s take a look at Schlumberger’s growth drivers for 4Q16.

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