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How the US Rig Count Affected SLB, HAL, and BHGE in 3Q17

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SLB’s revenues from North America

Schlumberger (SLB), Baker Hughes (BHGE), and Halliburton (HAL)—three of the four OFS (oilfield equipment and services) companies we’re comparing in this series—all saw higher YoY (year-over-year) revenues from North America in 3Q17. Schlumberger’s North America revenues rose 9% YoY in 3Q17, accounting for 34% of its total revenues.

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HAL’s and BHGE’s revenues from North America

By comparison, Halliburton’s (HAL) 3Q17 revenues from North America rose 91% YoY. The energy sector makes up 6.0% of the S&P 500 Index (SPX-INDEX). In the past year, the S&P 500 Index has risen 22%, compared with the 5% fall in HAL’s stock price.

Halliburton’s North America revenue share was unchanged in 3Q17 over 3Q16. HAL generated ~58% of its total revenues from North America in 3Q17. National Oilwell Varco’s (NOV) and Baker Hughes’s (BHGE) quarterly geographic revenue breakdowns are not available.

Notably, HAL makes up 0.20% of the iShares S&P 500 Value ETF (IVE), which has risen 16% in the past year. (You can read Market Realist’s series Baker Hughes, a GE Company: 3Q17 Earnings Overview for more on what’s happening with BHGE.)

The US rig count

By September 30, 2017, the US rig count had risen 80% from where it was one year ago. From September 29, 2017, to the week ending November 3, 2017, the US rig count has fallen ~4%. Remember, a lower rig count can knock down OFS companies’ revenues and earnings going forward.

Next, we’ll discuss how the international rig count affected these companies’ revenues.

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