 |
|
| View previous topic :: View next topic |
| Author |
Schlumberger (SLB) |
HenryTo
Site Admin
Joined: 06 Aug 2004
Posts: 11742
Location: Los Angeles, California
|
 Posted: Mon Jul 25, 2011 11:00 am Post subject: Schlumberger (SLB) |
 |
|
Morningstar on SLB's 2Q earnings--with a discussion on the industry's significant pricing power over the next 18 months:
| Quote: | | Schlumberger SLB turned in very good second-quarter results. Oil services revenue was $8.99 billion and pretax income was $1.75 billion, up 11% and 20% sequentially. Pricing power in North America was very strong, as we saw in Halliburton's HAL results earlier this week. More important, Schlumberger noted that toward the end of the quarter, it became clear that pricing power was spreading to deep-water services and other complex services both in North America and internationally. The oil services industry is struggling to meet demand. The significant demand from North American liquids-rich plays requires much more equipment and services expertise than has historically been needed. This North American dynamic, coupled with a greater-than-expected demand response to the loss of Libyan barrels and other geopolitical uncertainty, has made it very difficult for the services industry to supply the necessary services. Historically, the oil services industry has been able to manage increasing North American and international activity concurrently, but the step change in requirements for North American drilling has made it very, very difficult. Therefore, we think the oil services industry and Schlumberger are positioned to reap huge pricing power over 2011 and 2012. |
|
|
| Back to top |
|
 |
| Author |
Schlumberger (SLB) Replies |
HenryTo
Site Admin
Joined: 06 Aug 2004
Posts: 11742
Location: Los Angeles, California
|
| Posted: Tue Apr 24, 2012 2:47 am Post subject: |
|
|
Morningstar on SLB's 1Q results.
| Quote: | | Schlumberger SLB reported respectable first-quarter results. North America, as we indicated in our April 11 note, was affected by a number of factor s including gas-to-oil rig switching, higher materials costs, and pressure pumping pricing declines. Schlumberger's North American margins declined 410 basis points sequentially to 22.8%, which was greater than Halliburton's HAL 170-basis-point decline over the same period. However, Schlumberger indicated that the fourth-quarter margin of 26.9% was particularly strong because of high levels of software, artificial lift, and multiclient sales. These seasonal effects helped Schlumberger expand its margins in the fourth quarter while Halliburton's and Baker Hughes' North American margins declined. A better comparison between the firms is revenue, and excluding these seasonal effects, Schlumberger's North American revenue was flat sequentially in the first quarter versus Halliburton's 1% increase. Schlumberger's international results were more positive, in our view. Bidding remains competitive for standard technology projects, but Schlumberger indicated pricing sentiments are starting to move upward as the majority of its international contracts have been rebid and services capacity is tightening. Schlumberger highlighted several key international wins this quarter, including two integrated project management efforts in South Mexico and Ecuador, which will reward Schlumberger for any incremental gains in oil production. Schlumberger also won a contract with YPF to provide integrated services for shale completions in Argentina, which was the first fully dedicated shale completions crew in Latin America, and the crew has now performed more than 100 treatments in the Vaca Muerta shale. The firm still expects the international rig count to grow more than 10% in 2012, thanks to healthy levels of offshore and land drilling activity. In fact, international operating margin was flat sequentially at 19.1%, whereas we typically see a several-hundred-basis-point decline in the first quarter because of the seasonal effects from software and multiclient sales. This good performance and Schlumberger's strong overseas presence amid an improving market should help offset a weak North America in 2012. |
|
|
| Back to top |
|
|
HenryTo
Site Admin
Joined: 06 Aug 2004
Posts: 11742
Location: Los Angeles, California
|
| Posted: Fri Jan 20, 2012 5:09 pm Post subject: |
|
|
Morningstar on SLB's 4Q earnings.
| Quote: | | Schlumberger SLB delivered healthy fourth-quarter results with solid growth across all of its key markets and product lines. Revenue was $11 billion, up 7% sequentially, and pretax income increased 10% to $1.9 billion over the same time frame. There weren't any areas of weakness in the results. The important North American market turned in revenue of $3.5 billion, a 6% sequential increase, and pretax margin expanded another 160 basis points to 26.9%. Growth was led by seismic and deep-water work in the Gulf of Mexico and continued pricing momentum in the wireline and drilling product lines. Internationally, strong levels of integrated project management work in Mexico and Iraq helped boost growth. The artificial lift and wireline product lines were repeatedly called out by Schlumberger as driving growth in Latin America, Africa, and the Middle East. International pricing remains fairly competitive on large tenders for standard technology, but Schlumberger continues to see pricing strength for more specialized technologies. Schlumberger highlighted the uncertainty regarding its 2012 outlook, given the ongoing crisis in Europe, but it is planning for further growth for the year, as exploration and production companies are expected to ramp up spending, particularly overseas. |
|
|
| Back to top |
|
|
HenryTo
Site Admin
Joined: 06 Aug 2004
Posts: 11742
Location: Los Angeles, California
|
| Posted: Fri Oct 21, 2011 2:32 pm Post subject: |
|
|
Morningstar on SLB's 3Q earnings:
| Quote: | | Schlumberger SLB delivered solid third-quarter results. Revenue increased 6% to $10.23 billion from $9.62 billion in the prior quarter, while operating income excluding charges and credits jumped 12% sequentially to $1.32 billion. Once again, North America provided most of the uplift with a 15% sequential increase in revenue to $3.3 billion and a 24% boost in operating income to $836 million. North American margins now stand at 25.3%, but still remain substantially behind Halliburton's HAL 29.3%, although the margin gap stands at 400 basis points now versus 540 basis points last quarter. As we've noted previously, Schlumberger needs deep-water activity in the Gulf of Mexico to pick up substantially for the margin gap to narrow further, but even in this scenario, we doubt Schlumberger can overtake Halliburton's margins in North America. Schlumberger noted particular pricing strength in wireline and drilling-related products on land and offshore. Internationally, Schlumberger also saw signs of an improving market. The firm indicated there was pricing strength with its wireline and drilling and measurements technologies. Furthermore, Iraq, Saudi Arabia, Mexico with its integrated project management work, Brazil, and Russia were all standout performers. The company appears to be executing on its Iraq contracts more smoothly than Halliburton, which has struggled with its work in the country recently. On the flip side, Schlumberger's Middle East results declined as WesternGeco vessels transitioned between contracts, but if we exclude the negative effect from seismic, the region's revenue increased sequentially. Overall, the company acknowledged the uncertain near-term environment, but indicated that the tight oil supply cushion should continue to support drilling activity levels and services demand. |
|
|
| Back to top |
|
|
HenryTo
Site Admin
Joined: 06 Aug 2004
Posts: 11742
Location: Los Angeles, California
|
| Posted: Thu Sep 01, 2011 1:20 pm Post subject: |
|
|
Morningstar upgrades its moat rating on SLB:
| Quote: | | After careful consideration, we've upgraded our economic moat rating for Schlumberger SLB to wide from narrow. Schlumberger is benefiting from many of the same trends that led us to upgrade Halliburton's HAL moat to narrow last year (see our Stock Strategist "Why We're Increasing Halliburton's Moat to Narrow," published Dec. 1, 2010), but to a lesser extent because it was behind Halliburton in terms of recognizing the integrated opportunity in North America. However, Schlumberger's international dominance has never been in question. The firm holds leading positions in Russia and Europe and is a key player in every single major services region around the globe. Its comprehensive product portfolio, research and development and financial strength, and technology acquisition strategy make this firm an enduring franchise that is extremely unlikely to be toppled. The firm has spent decades building up its international workforce, which helps build closer relationships with national oil companies. The international exposure is important because the vast majority of the world's reserves are under the control of national oil companies, where Schlumberger has the closest relationships. We believe Schlumberger has a wide economic moat partially because of the oligopolistic nature of the oil services industry, where the largest players have significant advantages in terms of expertise, R&D, scale, and reputation/relationships. Schlumberger is differentiated from its three main competitors through its sheer size and overall industry leadership (number one or two in most product lines and regions), which allow it to pursue avenues such as lowering the cost of oil and gas megaprojects or integrated project-management efforts through operational improvements. These efforts cannot be pursued by competitors because they do not have the needed global scale, purchasing power, or organizational strengths to address these key issues. In contrast, Halliburton's narrow moat was earned through largely focusing on addressing the needs of shale plays in North America. |
|
|
| Back to top |
|
|
Please log in to view without the ad banners |
|
|
|
You cannot post new topics in this forum
You cannot reply to topics in this forum
You cannot edit your posts in this forum
You cannot delete your posts in this forum
You cannot vote in polls in this forum
|
Powered by phpBB
|
FAQ
Search
Memberlist
Usergroups
Statistics
Register
Profile
Log in to check your private messages
Log in
