Schlumberger (SLB) eanings preview: SPM continues to shine

7:17 pm ET, 17 Jul 2018

Schlumberger N.V. (SLB)  is expected to report earnings on July 20 before market open. The report will be for the fiscal quarter ending June 2018. Shares are trading at 67.27, down -1.19%.

What are SLB earnings expectations?  What news will the market be watching out for?  

Schlumberger is aiming its expertise in a somewhat new direction--lowering the cost per barrel of oil & gas development via the provisioning of integrated services. Management believes that a combination of Schlumberger’s unique technologies along with a new business model embodying full integration and alignment of interests will allow for transformational leaps in oilfield efficiencies and reservoir productivity. In the company’s fast-growing and highly profitable Schlumberger Production Management (SPM) business, this vision seems to be turning into reality.

SPM will play a key role in maintaining Schlumberger’s leadership position and continuing the company’s legacy of value creation. Schlumberger’s traditionally successful business lines will come under increasing pressure in years to come, owing to a sustained downturn in exploration activity. In Schlumberger’s exploration-driven business lines, economic profits are likely to be significantly lower than in the past.

That said, Schlumberger has long spent more on R&D than all its service company peers combined and more than all the oil majors.  The company has a multi-decade track record of innovation and a proven ability to generate shareholder value in even dismal oil market conditions.

Schlumberger N.V. has a history of meeting and beating analysts’ earnings estimates.  In the past four quarters, the company: 

  • Beat analyst EPS estimates by 5 cents ($.35 actuals vs. $.30 forecast) in FQ2’17;
  • Delivered on the analyst EPS estimate ($.42 actuals vs. $.42 forecast) in FQ3’17;
  • Beat analyst EPS estimates by 4 cents ($.48 actuals vs. $.44 forecast) in FQ4’17;
  • Beat analyst EPS estimates by 1 cent ($.38 actuals vs. $.37 forecast) in FQ1’18.

For FQ2’18, EPS is expected to grow by 23% year-over-year to $.43, while revenue is expected to grow 12% year-over-year to $8.34 billion.  

Schlumberger N.V. (SLB) forward P/E ratio is 23.03, and it’s high compared to its industry peers’ P/E ratio.

Schlumberger N.V. (SLB) average analyst price target ($80.55) is 19.74% above its current price ($67.27).

For the latest price and information on Schlumberger N.V., please visit Finstead and search for "SLB price" or "SLB news".

Schlumberger has earned solid economic profits for decades. It reached the front of the pack in wireline evaluation in the 1920s, and it hasn’t relinquished its position since. Since then, Schlumberger has used its unrivaled expertise in understanding oil & gas reservoirs to not only drive a continuous stream of profits in its legacy business lines, but the company has also applied this knowledge to develop other oilfield service business lines with nearly unwavering success. 

Schlumberger N.V. (SLB) Stock Guide

Updated at: 2:34 pm ET, 18 Sep 2020

Before we start: if you're looking for SLB stock price, you can quickly find it out by visiting Finny and typing "SLB quote". If you're looking for a quick scoop on SLB stock (chart, price target, market cap, news and buy or sell analysis), go to Finny and look for "SLB". You'll get all this info in one place. Or you can just type "SLB news" to get the latest stock news.

Looking to buy or sell Schlumberger N.V. (SLB)? Interested in getting the full scoop on SLB, including earnings and dividends, stock forecast, buy or sell analysis and key stats? If so, you came to the right place.

In this SLB stock guide, we'll address key questions about SLB, above and beyond what you can find on Yahoo Finance, Zacks, MarketWatch or Morningstar.

Here is what you'll be able to find in this guide:

Earnings and Dividends: earnings, earnings date, dividend rate and dividend yield;
Analyst Predictions: stock forecast and analyst ratings;
Analysis: Finny Score and buy or sell analysis;
Key Stats: revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio, industry, sector, and number of employees.

And here is the list of questions we'll answer:
1. What are SLB earnings?
2. What is SLB dividend?
3. What is SLB dividend yield?
4. What is SLB stock forecast (i.e., prediction)?
5. SLB buy or sell? What is SLB Finny Score?
6. What are the reasons to buy SLB? Why should I buy SLB stock?
7. What are the reasons to sell SLB? Why should I sell SLB stock?
8. What are SLB key stats: revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio industry, sector, and number of employees?

So let's start. Scroll down to the question that interests you the most.

Earnings and Dividends

1. What are SLB earnings?

SLB trailing 12-month earnings per share (EPS) is -$15.77.

2. What is SLB dividend?

SLB forward dividend is $0.50.

3. What is SLB dividend yield?

SLB forward dividend yield is 2.63%.

Analyst Predictions

4. What is SLB stock forecast (i.e., prediction)?

Based on SLB analyst price targets, SLB stock forecast is $23.58 (for a year from now). That means the average analyst price target for SLB stock is $23.58. The prediction is based on 37 analyst estimates.

The low price target for SLB is $12.00, while the high price target is $30.00.

SLB analyst rating is Buy.

Analysis

5. SLB buy or sell? What is SLB Finny Score?

#{finnyScore:56}Our quantitative analysis shows 5 reasons to buy and 4 reasons to sell SLB, resulting in Finny Score of 56.

6. What are the reasons to buy SLB? Why should I buy SLB stock?

Here are the reasons to buy SLB stock:

  • The firm’s size and leading positions in the most profitable areas of oilfield services all but guarantee Schlumberger will be the industry’s most profitable company for the foreseeable future.
  • Balancing the needs to keep costs low and products/technology fresh (which requires continued investments) is incredibly difficult in an industry as dynamic and competitive as oilfield services. Schlumberger has long demonstrated an ability to better manage these opposing forces than the rest of the industry.
  • Schlumberger is the largest oilfield services player in the world with presence in every energy market across the world. Also, in all the operating business segments, the company is among the top players. Given the huge size and attractive reservoir and well technologies, the company will likely outperform peers.
  • Schlumberger expects businesses in the domestic and international markets to grow, courtesy of the customer’s preferred choices for awarding contracts to the oilfield players primarily on the basis of performances. Schlumberger is poised to gain from this trend as it has all the expertise and latest technologies to meet the increased demand.
  • There has been consistent growth in the company’s drilling services business, primarily because of higher North American onshore operations. Schlumberger is gaining traction on rising demand for assisting upstream players in their horizontal drilling activities. Schlumberger also projects heightened hydraulic fracturing work in the U.S. land market, especially during the second quarter of 2018.
  • SLB profitability is improving. The YoY profit margin change was 1.12 percentage points. See SLB profitability chart.
  • SLB forward dividend yield is 2.63%, higher than the industry (0.32%) and sector (0.33%) forward dividend yields. See SLB forward dividend chart.
  • SLB average analyst rating is Buy. See SLB analyst rating chart.
  • SLB average analyst price target ($23.58) is above its current price ($18.89). See SLB price target chart.
  • SLB cash to debt ratio is 0.21, higher than the average industry (0.14) and sector (0.09) cash to debt ratio. See SLB cash to debt chart.

7. What are the reasons to sell SLB? Why should I sell SLB stock?

Let's look at the reasons to sell SLB stock (i.e., the bear case):

  • Schlumberger’s invested capital has ballooned during the 2010s and is now three times the level it was in 2009. The bar is thus as high as it’s ever been for Schlumberger to generate economic profits and makes it unlikely that the 14%-16% ROICs prior to the current downturn are representative of what the firm can generate in future midcycle conditions.
  • Despite the company’s investments and efforts to increase the amount of its business generated by integrated/bundled offerings, customer uptake has thus far been slow.
  • Schlumberger has lesser exposure to the U.S. shale plays — where more drillers have gathered following a partial recovery in crude prices. This is reflected in the company’s generation of 33%, 34% and 36% of revenues from North America during third-quarter 2017, fourth-quarter 2017 and first-quarter 2018, respectively. Thus, Schlumberger is losing out on the opportunity to gain profitable contracts from shale drillers of late.
  • We are concerned about the company’s rising project startup costs stemming from mobilization and reactivation of equipment.
  • The company has to comply with the stringent U.S. laws to ensure that its activities do not pollute the environment. For the compliance, Schlumberger has to incur significant expenses that might dent earnings and also reduce shareholders’ returns.
  • SLB quarterly revenue growth was -35.20%, lower than the industry and sector average revenue growth (0.02% and -0.04%, respectively). See SLB revenue growth chart.
  • SLB forward P/E ratio is 30.05, which is high compared to its industry peers’ P/E ratios. See SLB forward P/E ratio chart.
  • SLB Price/Sales ratio is 0.87, which is high compared to its industry peers’ P/S ratios. See SLB forward Price/Sales ratio chart.
  • SLB Enterprise Value/Revenue multiple is 1.37, which is high compared to its industry peers’ Enterprise Value/Revenue multiples. See SLB Enterprise Value/Revenue chart.

Key Stats

8. What are SLB key stats : revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio industry, sector, and number of employees?

Let's look at the key statistics for SLB:

Metrics SLB
Price $15.60
Average Price Target / Upside $23.58 / 51.15%
Average Analyst Rating Buy
Forward Dividend Yield 2.63%
Industry Oil & Gas Equipment & Services
Sector Energy
Number of Employees 100,000
Market Cap $25.86B
Forward P/E Ratio 30.05
Price/Book Ratio 0.87
Revenue (TTM) $29.58B
YoY Quarterly Revenue Growth -35.20%
Profit Margin -73.90%

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