• Revenue of $8.5 billion increased 2% sequentially
• Pretax operating income of $1.2 billion increased 5% sequentially
• EPS was $0.46
• Cash flow from operations was $1.8 billion
• Free cash flow was $1.0 billion
HOUSTON-Monday 22 October 2018 [ AETOS Wire ]
(BUSINESS WIRE) -- Schlumberger Limited (NYSE: SLB) today reported results for the third quarter of 2018.
(Stated in millions, except per share amounts)
| |||||||||||||||
Three Months Ended
|
Change
| ||||||||||||||
Sept. 30, 2018
|
Jun. 30, 2018
|
Sept. 30, 2017
|
Sequential
|
Year-on-year
| |||||||||||
Revenue
|
$8,504
|
$8,303
|
$7,905
|
2%
|
8%
| ||||||||||
Pretax operating income
|
$1,152
|
$1,094
|
$1,059
|
5%
|
9%
| ||||||||||
Pretax operating margin
|
13.5%
|
13.2%
|
13.4%
|
36 bps
|
15 bps
| ||||||||||
Net income - GAAP basis
|
$644
|
$430
|
$545
|
50%
|
18%
| ||||||||||
Net income, excluding charges & credits*
|
$644
|
$594
|
$581
|
8%
|
11%
| ||||||||||
Diluted EPS - GAAP basis
|
$0.46
|
$0.31
|
$0.39
|
48%
|
18%
| ||||||||||
Diluted EPS, excluding charges & credits*
|
$0.46
|
$0.43
|
$0.42
|
7%
|
10%
| ||||||||||
North America revenue
|
$3,189
|
$3,139
|
$2,602
|
2%
|
23%
| ||||||||||
International revenue
|
$5,215
|
$5,065
|
$5,147
|
3%
|
1%
| ||||||||||
North America revenue, excluding Cameron
|
$2,572
|
$2,546
|
$2,086
|
1%
|
23%
| ||||||||||
International revenue, excluding Cameron
|
$4,559
|
$4,387
|
$4,430
|
4%
|
3%
| ||||||||||
*These are non-GAAP financial measures. See section below entitled "Charges & Credits" for details.
Schlumberger
Chairman and CEO Paal Kibsgaard commented, “Our third-quarter revenue
of $8.5 billion grew 2% sequentially, driven by the International Areas
where the broad-based activity recovery continued and where sequential
revenue growth outpaced that of North America for the first time since
the second quarter of 2014. In North America, sequential growth remained
positive but slowed from the rates of previous quarters as takeaway
constraints in the Permian impacted hydraulic fracturing activity.
“In
North America, third-quarter revenue of $2.6 billion, excluding
Cameron, increased 1% sequentially driven by Artificial Lift and
Drilling as we continued to gain market share on the back of our leading
technology portfolio. Service revenue from our OneStimSM hydraulic
fracturing business was increasingly impacted by softening activity and
pricing over the course of the quarter. This was offset, however, by
robust performance from our vertically integrated sand business, which
in addition to serving OneStim now also competes in the third-party
market. Offshore North America, drilling activity was impacted by
scheduled platform maintenance and planned workover operations, the
combination of which led to a less favorable activity mix for
Schlumberger.
“In
the International Areas, third-quarter revenue of $4.6 billion,
excluding Cameron, grew 4% sequentially as we continued to see solid
growth in all operating regions. Sequential performance, excluding
Cameron, was driven by 7% growth in Latin America and 3% growth in the
Middle East & Asia due to higher activity for both national oil
companies and independents throughout both Areas. This resulted from the
continued ramp-up of our lump-sum turnkey (LSTK) projects in Saudi
Arabia and strong Integrated Drilling Services (IDS) activity in Iraq,
India, and Mexico. However, this performance was partly offset by lower
hydraulic fracturing activity as we completed and demobilized a major
contract in the Middle East. In Europe, CIS, and Africa, our sequential
growth was a solid 4% as strong activity in Russia and Sub-Saharan
Africa more than offset the impact of labor disputes and scheduled
summer maintenance in the North Sea.
“Turning
to our technologies, our performance was led by Drilling with 9%
sequential growth as we successfully mobilized an additional 19 drilling
rigs for our integrated drilling projects where activity was strong,
particularly in Russia, Mexico, Saudi Arabia, Iraq, and India. This
supported solid sequential growth for our IDS, Drilling &
Measurements, and M-I SWACO product lines. Reservoir Characterization
grew 2% sequentially, driven by strong activity for our Wireline and
Testing Services product lines in the international markets. Revenue
from Production was largely unchanged from the previous quarter due to
the softening hydraulic fracturing activity in North America land.
Cameron revenue was flat sequentially as increased sales in Surface
Systems and Drilling Systems were offset by lower revenue from our
OneSubseaTM and Valves & Measurement product lines.
“Looking
at pricing and contracts, we continued to see improvements in terms and
conditions and basic rates for selected contracts in the international
markets. However, this has yet to make a significant impact on our
results. Still, we expect to fully deploy our remaining excess
international equipment capacity by the end of the year. As a result, we
anticipate pricing discussions to accelerate in the coming quarters as
the certainty of products and services supply will become more important
for our customers.
“From
a macro perspective, the oil market continued to tighten in the third
quarter as seen by a further draw in global oil inventories and a
significant increase in oil prices despite continued strong production
from the US and increasing output from key OPEC countries. Global spare
capacity is now less than 2%. The tightening supply and demand balance
is driven by accelerating decline rates in the international production
base and is further exacerbated by the ongoing reduction in Venezuelan
and Iranian exports. Geopolitical events and their impact on supply are
also becoming an increasing oil market consideration as the challenging
security situation in several key countries could affect activity and
production going forward. And while the current Permian takeaway
constraints in North America should be addressed within the next 12 to
18 months, a series of reservoir- and production-related challenges is
emerging in the US shale basins that could dampen the most optimistic
production growth projections.
“With
the outlook for global economic growth and oil demand remaining solid,
we continue to see a need for a multiyear increase in international
E&P investment, which is very good news for Schlumberger. Through
the work we have done over the past four years to expand our external
offering and modernize our internal execution platform, we are very well
positioned to outgrow the market in the coming upcycle and to generate
superior operating margins and cash returns for the benefit of our
shareholders.”
Other Events
During
the quarter, Schlumberger repurchased 1.5 million shares of its common
stock at an average price of $64.98 per share, for a total purchase
price of $100 million.
On
August 22, 2018, Schlumberger and Shearwater GeoServices Holding AS
announced that they have entered into a definitive agreement for
Shearwater to acquire the marine seismic acquisition assets and
operations of WesternGeco, the geophysical services product line of
Schlumberger. The transaction is subject to regulatory approvals and
other customary closing conditions. The transaction is expected to close
in the fourth quarter of 2018.
On
October 18, 2018, Schlumberger’s Board of Directors approved a
quarterly cash dividend of $0.50 per share of outstanding common stock,
payable on January 11, 2019 to stockholders of record on December 5,
2018.
To read the full article, click HERE.
About Schlumberger
Schlumberger
is the world's leading provider of technology for reservoir
characterization, drilling, production, and processing to the oil and
gas industry. Working in more than 85 countries and employing
approximately 100,000 people who represent over 140 nationalities,
Schlumberger supplies the industry's most comprehensive range of
products and services, from exploration through production, and
integrated pore-to-pipeline solutions that optimize hydrocarbon recovery
to deliver reservoir performance.
Schlumberger
Limited has principal offices in Paris, Houston, London, and The Hague,
and reported revenues of $30.44 billion in 2017. For more information,
visit www.slb.com.
*Mark of Schlumberger or Schlumberger companies.
†Japan
Oil, Gas and Metals National Corporation (JOGMEC), formerly Japan
National Oil Corporation (JNOC), and Schlumberger collaborated on a
research project to develop logging while drilling (LWD) technology that
reduces the need for traditional chemical sources. Designed around the
pulsed neutron generator (PNG), EcoScope service uses technology that
resulted from this collaboration. The PNG and the comprehensive suite of
measurements in a single collar are key components of the EcoScope
service that deliver game-changing LWD technology.
‡Mark of ExxonMobil Corporation.; technology licensed exclusively to Schlumberger.
Notes
Schlumberger
will hold a conference call to discuss the earnings press release and
business outlook on Friday, October 19, 2018. The call is scheduled to
begin at 8:30 a.m. US Eastern Time. To access the call, which is open to
the public, please contact the conference call operator at +1 (800)
288-8967 within North America, or +1 (612) 333-4911 outside North
America, approximately 10 minutes prior to the call’s scheduled start
time. Ask for the “Schlumberger Earnings Conference Call.” At the
conclusion of the conference call, an audio replay will be available
until November 19, 2018 by dialing +1 (800) 475-6701 within North
America, or +1 (320) 365-3844 outside North America, and providing the
access code 453092. The conference call will be webcast simultaneously
at www.slb.com/irwebcast on a listen-only basis. A replay of the webcast
will also be available at the same web site until November 30, 2018.
This
third-quarter 2018 earnings release, as well as other statements we
make, contain “forward-looking statements” within the meaning of the
federal securities laws, which include any statements that are not
historical facts, such as our forecasts or expectations regarding
business outlook; growth for Schlumberger as a whole and for each of its
segments (and for specified products or geographic areas within each
segment); oil and natural gas demand and production growth; oil and
natural gas prices; improvements in operating procedures and technology,
including our transformation program; capital expenditures by
Schlumberger and the oil and gas industry; the business strategies of
Schlumberger’s customers; the effects of U.S. tax reform; our effective
tax rate; Schlumberger’s SPM projects, joint ventures and alliances;
future global economic conditions; and future results of operations.
These statements are subject to risks and uncertainties, including, but
not limited to, global economic conditions; changes in exploration and
production spending by Schlumberger’s customers and changes in the level
of oil and natural gas exploration and development; general economic,
political and business conditions in key regions of the world; foreign
currency risk; pricing pressure; weather and seasonal factors;
operational modifications, delays or cancellations; production declines;
changes in government regulations and regulatory requirements,
including those related to offshore oil and gas exploration, radioactive
sources, explosives, chemicals, hydraulic fracturing services and
climate-related initiatives; the inability of technology to meet new
challenges in exploration; and other risks and uncertainties detailed in
this third-quarter 2018 earnings release and our most recent Forms
10-K, 10-Q, and 8-K filed with or furnished to the Securities and
Exchange Commission. If one or more of these or other risks or
uncertainties materialize (or the consequences of any such development
changes), or should our underlying assumptions prove incorrect, actual
outcomes may vary materially from those reflected in our forward-looking
statements. Schlumberger disclaims any intention or obligation to
update publicly or revise such statements, whether as a result of new
information, future events or otherwise.
Contacts
Schlumberger Limited
Simon Farrant – Vice President of Investor Relations, Schlumberger Limited
Joy V. Domingo – Manager of Investor Relations, Schlumberger Limited
Office +1 (713) 375-3535
investor-relations@slb.com
Permalink : https://www.aetoswire.com/news/schlumberger-announces-third-quarter-2018-results/en