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



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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