[ACCESSWIRE]
Upcoming AWS Coverage on Baker Hughes
LONDON, UK / ACCESSWIRE / January 26, 2017 / Active Wall St. announces its post-earnings coverage on Schlumberger Ltd. (NYSE: SLB). The Company released fourth quarter and fiscal 2016 results on January 20, 2017. The world's largest oil-field services Company's loss narrowed on a y-o-y basis, while adjusted earnings increased sequentially. Register with us now for your free membership at:
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One of Schlumberger's competitors within the Oil & Gas Equipment & Services space, Baker Hughes Inc. (NYSE: BHI), is expected to report its fiscal Quarter ending December 2016 earnings results on January 26, 2017 before market open. AWS will be initiating a research report on Baker Hughes following the release of its earnings results.
Today, AWS is promoting its earnings coverage on SLB; touching on BHI. Get our free coverage by signing up to:
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http://www.activewallst.com/registration-3/?symbol=BHI
Earnings Reviewed
For the three months ended on December 31, 2016, Schlumberger's revenue of $7.11 billion increased 1% sequentially with North America growing 4% and International increasing 1%. For the full year, the Company reported revenues of $27.81 billion compared to 2015 revenues of $35.48 billion.
Schlumberger reported Q4 2016 loss of $204 million, or $0.15 per share, compared to a loss of $1.02 billion, or $0.81 per share, a year earlier. Schlumberger stated that during the reported quarter it took a $536 million restructuring charge, largely related to workforce reduction and facility closure, $76 million of Cameron related merger and integration charges, and the $63 million charge relating to the devaluation of the Egyptian Pound. On an adjusted basis, Schlumberger's posted adjusted per-share earnings were $0.27 per share; this represents an increase of $0.02 sequentially. Schlumberger's revenue and adjusted earnings surpassed analysts' expectations of adjusted per-share profit of $0.27 and revenue of $7.07 billion.
Segment Results
During Q4 2016, Schlumberger's Reservoir Characterization Group revenue was $1.7 billion, with 76% coming from international operations. Revenue was 1% higher sequentially due to the ramp-up in activity on the early production facilities projects in Kuwait, higher Wireline perforating activity in Egypt, increased horizontal logging work in Qatar, and increased software license and maintenance sales.
For the reported quarter, the Company's Drilling Group revenue totaled $2.0 billion, of which 76% came from the international markets, and was flat sequentially as the continued strong directional drilling activity in North America land was offset by lower drilling activity in the International Areas. Pre-tax operating margin of 12% expanded 81 bps sequentially. This was due to pricing improvements from greater uptake of drilling technologies on increasing activity on land in the US which mainly affected Drilling & Measurements and Bits & Drilling Tools.
For Q4 2016, Schlumberger's Production Group posted revenue of $2.2 billion, of which 72% came from the international markets, was 5% higher sequentially from strong fracturing activity on unconventional resource developments on land in the Middle East, mainly in Saudi Arabia, and in North America where the land rig count and fracturing stage count increased. Pre-tax operating margin of 6% increased 134 bps sequentially on increased activity, which drove efficiency and better operational execution in the Middle East.
Cameron Group revenue of $1.3 billion, of which 71% came from international markets, was flat sequentially, with growth in OneSubsea and Surface Systems offset by reduced product sales from Valves & Measurement and from a declining order backlog in Drilling Systems. Pre-tax operating margin of 14% declined 207 bps sequentially due to the drop in high-margin Drilling Systems project volume.
Geographical Basis
In North America, Schlumberger's revenue increased 4% sequentially to $1.77 billion from $1.70 billion in Q3 2016 on increased land activity while offshore declined. International revenue increased 1% sequentially to $5.28 billion led by strong growth in the Middle East and Asia areas, which was partially offset by continued weakness in the Latin America area and seasonal activity declines in the Europe/CIS/Africa area.
Middle East and Asia areas revenue for the Company increased 5% sequentially to $2.49 billion. This was mainly due to strong fracturing and Integrated Production Services (IPS) activity on unconventional land resource developments and increased productivity from land seismic crews in Saudi Arabia. Revenue in Egypt increased from higher perforating, while Qatar grew from increased horizontal logging work.
Revenue in the Latin America area declined 4% to $952 million compared to revenue of $992 million in Q3 2016, primarily in the Mexico & Central America Geo-market where customer budget constraints led to a sharp drop in overall rig count, affecting both deepwater and shallow-water projects. Revenue in Argentina decreased as unconventional resource development work was affected by unfavourable weather conditions and other delays. These declines, however, were partially mitigated by strong drilling and project activity in the Peru, Colombia, and Ecuador Geo-market as the rig count increased by 46% following the rise in oil prices.
Europe/CIS/Africa area revenue totaled $1.83 billion, down 2% compared to revenue of $1.87 billion in Q3 2016, primarily due to the seasonal conclusion of peak summer drilling activity in Russia and exploration services campaigns in Norway. The Sub-Saharan Africa Geo-market contributed to the area's revenue decline as rigs demobilized and projects were completed, mainly in Angola and Congo.
Balance Sheet
During Q4 2016, Schlumberger generated $2 billion of cash flow from operation, while for FY16 it generated $6.3 billion of cash flow from operations. The cash flow generation was excluding the severance payments of approximately $150 million during Q4 2016 and making $950 million of severance and transaction-related payments associated with the acquisition of Cameron during FY16. Other significant liquidity events during the reported quarter included $654 million on CapEx, and investment of approximately $160 million in SPM projects, $130 million in multi-client projects. For FY17, CapEx, excluding multi-client and SPM investment, is expected to be approximately $2.2 billion.
During Q4 2016, Schlumberger repurchased 1.5 million shares of its common stock at an average price of $78.21 per share for a total purchase price of $116 million. On January 19, 2017, the Company's Board of Directors approved a quarterly cash dividend of $0.50 per share of outstanding common stock, payable on April 17, 2017 to stockholders of record on February 15, 2017.
Stock Performance
At the closing bell, on Wednesday, January 25, 2017, Schlumberger's stock climbed 1.10%, ending the trading session at $85.51. A total volume of 5.94 million shares were traded at the end of the day, which was higher than the 3-month average volume of 5.42 million shares. In the last six months and previous twelve months, shares of the Company have advanced 7.40% and 34.33%, respectively. Moreover, the stock gained 1.86% since the start of the year. The stock has a dividend yield of 2.34% and currently has a market cap of $119.95 billion.
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