Schlumberger Reports Q2 2018 Earnings, Beats Estimates



Schlumberger’s Q2 2018 revenues

Schlumberger (SLB) released its Q2 2018 financial results on July 20. It reported total revenue of $8.3 billion, up 11.3% from $7.46 billion in Q2 2017. Year-over-year, its revenues increased, mostly due to 42.6% higher revenues from North America, led primarily by higher revenues in its Production segment. Schlumberger also saw strong rig mobilization in its international integrated drilling business.

Compared to the first quarter, Schlumberger’s revenue increased 6.1%. Deployment of additional hydraulic fracturing, directional drilling capacity, and upstream project recovery in Asia, Australia, Europe, and Africa pushed quarter-over-quarter revenues up in Q2 2018.

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Schlumberger’s Q2 2018 earnings

Schlumberger’s Q2 2018 adjusted net EPS came in at $0.43, which exceeded the consensus sell-side analysts’ EPS estimate by 0.9%. Strong operating income growth in the Reservoir Characterization and Production groups resulted in SLB’s earnings marginally beating analysts’ estimates. However, a decline in operating earnings in its Drilling and Cameron groups partially pulled back its second-quarter earnings.

Compared to Q2 2017, SLB’s adjusted earnings improved 23% in Q2 2018. On average, its adjusted EPS has exceeded the consensus EPS by 6% in the past 13 quarters.

What affected Schlumberger’s reported earnings in Q2?

In Q2 2018, SLB’s reported net income was $430 million. That was an improvement over Q2 2017 when it reported a $74 million net loss. Year-over-year, a 43% operating income growth in the Production group and a 17% operating income growth in its Reservoir Characterization group helped improve its bottom line.

Compared to the first quarter when Schlumberger recorded $525 million in net income, its second-quarter reported net income was a markdown. Its net income was reduced by $184 million in workforce reduction charges. Total non-recurring charges amounted to $591 million a year ago.

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How did Schlumberger fare in the first half of 2018?

In the first six months of 2018, Schlumberger’s revenues increased 12.4% compared to the first six months of 2017. Its reported net income rose to $955 million compared to $205 million a year ago. Its net income for the first half of 2018 was reduced by $184 million non-recurring charges compared to $674 million a year ago.

Analysts’ estimates for SLB’s peers

Wall Street analysts expect National Oilwell Varco (NOV) to switch to a $0.02 adjusted profit in Q2 2018 compared to $0.21 adjusted loss in Q1 2018. They expect Core Laboratories’ (CLB) Q2 2018 adjusted earnings to improve 3% compared to Q1 2018.

You can find out more about Wall Street’s expectations in Market Realist’s The Top Five Oilfield Companies by Expected Revenue Growth in Q2.

You can also learn more about the oilfield services industry in Market Realist’s The Oilfield Equipment and Services Industry: A Primer.


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