Schlumberger (NYSE: SLB), the world's
oilfield service leader, experienced what can only be
called
a difficult day. Not only were its earnings a
disappointment and its look at the future less than
enthusiastic, but Mr. Market didn't take the news well and
stripped $3.40 from Schlumberger's share price following the
announcement.
For the quarter, the company reported third-quarter income
of $787 million, a 48% slide from the same quarter a year
ago, when the company earned $1.53 billion. On a per-share
basis, results dipped 4% sequentially, excluding $207 million
in charges during the second quarter of this year. Diluted
earnings per share were $0.65 per share for the most recent
quarter, compared to $1.25 in the third quarter of 2008.
Schlumberger, which serves everyone from
big integrated companieslike
Total (NYSE: TOT) to the world's state owned
oil companies, generated $4.95 billion in revenue through its
Oilfield Services segment. That number was down 22% year on
year. WesternGeco, its seismic unit, had its top-line shrink
48%, to $463 million, from the comparable quarter last
year.
During the quarter, Schlumberger
teamed up with
National Oilwell Varco (NYSE: NOV) in a joint
venture to provide high-speed drill-string telemetry as a
safety and efficiency measure in petroleum operations. It
also performed work for
Devon (NYSE: DVN) in the Barnett Shale,
Apache (NYSE: APA) in the North Sea,
Anadarko (NYSE: APC) in the Gulf of Mexico's
booming deepwater, and
Noble Energy (NYSE: NBL) in Equatorial
Guinea. Its work for public companies doesn't begin to list
the many projects the company undertook for state companies
across the globe.
Nevertheless, Andrew Gould, the company's CEO was somewhat
less than euphoric during the company's call following its
earnings release. For instance, as he noted, "In North
America, we feel the current slight recovery in drilling to
be fragile and not likely to significantly improve service
activity and pricing until late 2010." As to natural gas, he
noted, "We consider that
world gas marketsare oversupplied and will remain so for
some time, absent a strong recovery in industrial
demand."
So what should we make of Schlumberger results for the
quarter? My inclination is to remind Fools that, in my
opinion, the company, with its size, scope, and technological
advantages, remains the leader of the pack in its sector. So
if your investment horizon is relatively lengthy, this might
be a good time for a buy order.
Schlumberger has been accorded a full five-star status by
Motley Fool CAPSplayers.
Why not head for the company's
CAPS
pageand register your opinion?
This article was originally published as
The 800-Pound Oilfield Gorilla Takes a Tumbleon
Fool.com
Copyright 2009 The Motley Fool, LLC. All rights
reserved.
|