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How the US Rig Count Affected SLB, HAL, and BHI in 4Q16

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North American revenue

In the past year, Schlumberger’s (SLB) share of North American revenue has fallen 21%, the most among our set of oilfield equipment and services (or OFS) companies.

In 4Q16, SLB’s North American revenue fell to 25% of its total revenue, compared to 29% in 4Q15. Halliburton’s (HAL) 4Q16 North American revenue fell 16% compared to a year ago. Baker Hughes’s (BHI) North American revenue fell 19% in 4Q16 over 4Q15.

Despite a fall in its revenue, BHI’s North American revenue rose significantly in 4Q16 compared to 4Q15. National Oilwell Varco’s (NOV) geographic revenue breakup isn’t available.

BHI makes up 0.16% of the iShares S&P 500 Value ETF (IVE). The energy sector makes up 11.7% of IVE. Read Market Realist’s Why Did Baker Hughes Miss 4Q16 Earnings Estimates? to learn about what’s happening to BHI.

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US rig count

By December 31, 2016, the US rig count had fallen 6% compared to a year ago. Since July 2016, the US rig count has moved upward. From December 31, 2016, to February 10, 2017, the US rig count trend strengthened, rising 13%. A higher rig count could increase OFS companies’ revenues and earnings going forward.

Next, let’s discuss how a change in the international rig count affected these companies’ international revenues.

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