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Schlumberger’s Free Cash Flow in 3Q17

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Dec. 4 2020, Updated 10:53 a.m. ET

Schlumberger’s operating cash flow

Schlumberger’s (SLB) operating cash flow rose ~35% in 3Q17—compared to 3Q16. Schlumberger generated ~$1.9 billion in operating cash flow in 3Q17. Increased revenues in the past year primarily led to the increase in its operating cash flow.

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Schlumberger’s FCF and capex

Schlumberger’s capital expenditure (or capex) rose ~48% in the past year until 3Q17. Despite higher capex, a steeper rise in the operating cash flow caused the FCF (free cash flow) to rise in the past year. In 3Q17, Schlumberger’s FCF was $1.1 billion. The FCF includes Schlumberger’s expenditure on SPM investments and multiclient seismic data. Schlumberger capitalizes the costs of obtaining multiclient seismic data. Schlumberger’s FCF has been positive in the past 13 quarters.

In comparison, Superior Energy Services’ (SPN) 3Q17 FCF was -$14.5 million. National Oilwell Varco’s (NOV) 3Q17 FCF was $171 million, while TechnipFMC’s (FTI) 3Q17 FCF was -$78 million.

Schlumberger’s capex plans for 2017

In 2017, Schlumberger plans to spend $2.1 billion in capex. The estimate was lowered 5% in 3Q17—compared to Schlumberger’s previous capex estimates in 2Q17. Schlumberger’s 2017 capex is expected to remain unchanged compared to 2016. Schlumberger accounts for 0.38% of the SPDR S&P 500 ETF (SPY). SPY tracks the price and yield performance of the S&P 500 Index (SPX-INDEX). The SPX-INDEX rose 18% in the past year—compared to a 24% fall in Schlumberger’s stock price.

Next, we’ll discuss Schlumberger’s dividend and dividend yield.

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