The world's largest oilfield services company, Schlumberger Limited (SLB), said Thursday that its first quarter profit fell 28% from last year, as demand for its services fell while its customers struggled with lower energy prices and slowing demand.
The Houston-based company reported fiscal first quarter profits of $938 million, or 78 cents per share, down from $1.3 billion, or $1.06 per share, in the year-ago period. Overall revenue fell 5% to $6 billion in the quarter.
On average, Wall Street analysts expected earnings of 73 cents per share.
The company said that revenue dropped 3 percent to $5.4 billion at its oilfield services unit, while its WesternGeco seismic saw an 18% drop to $551 million.
Schlumberger shares rose $3.34, or +7.2%, in Friday afternoon trading.
The Bottom Line
We have avoided the shares of SLB since we began our June coverage, when the shares were trading at $101.94. The company has a 1.80% dividend yield, based on last night’s closing stock price of $46.61. The stock has technical support in the $38 price area. If the shares can firm up and rally further here, we see overhead resistance around the $51-55 level. We would remain on the sidelines for now.
Schlumberger Limited (SLB) is not recommended at this time, holding a Dividend.com DARS Rating of 3.1 out of 5 stars.
Be sure to visit our complete recommended list of the Best Dividend Stocks, as well as a detailed explanation of our ratings system here.
