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Analyzing Schlumberger’s Segments in Q2 2018

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Schlumberger’s revenues by segment

Schlumberger’s (SLB) Production group witnessed the highest revenue growth (~30.5% increase) in the second quarter over the second quarter of 2017, followed by its Drilling (6.0% increase) and Cameron (5.0% increase) groups. On the other hand, the Reservoir Characterization group saw a 7.0% revenue decrease during the same period.

The Production group was the highest revenue contributor (39.0%) for SLB in the second quarter, while Cameron Group’s revenues were the lowest (15.0%) among its segments in the second quarter.

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Schlumberger’s geography-wise revenue analysis

Schlumberger’s (SLB) revenues from North America did much better in the second quarter versus the second quarter of 2017 (up 42.6%). SLB’s revenues from Latin America fell 11.6%, while its revenues from the Middle East and Asia region and the Europe/CIS/Africa region remained steady year-over-year in the second quarter. North America accounted for 38.0% of SLB’s second-quarter revenues, followed by the Middle East and Asia (29.0%).

In comparison, Halliburton (HAL), which releases its the second-quarter earnings on July 23, saw 62.4% of its revenues generating in North America in the second quarter.

Schlumberger’s segment margin analysis

The Reservoir Characterization group’s second-quarter operating income margin increased to 21.0% from 17.0% in the second quarter of 2017. The Production group also experienced operating margin improvement from the second quarter of 2017 to the second quarter (9.0% to 10.0%). The Drilling group’s operating margin deflated to 13.0% in the second quarter from 14.0% in the second quarter of 2017.

Next, we’ll discuss Schlumberger’s returns.

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