- Oilfield service provider, Schlumberger ( NYSE: SLB ) is scheduled to announce Q2 earnings results on Friday, July 22nd, before market open.
- The consensus EPS Estimate is $0.40 (+33.3% Y/Y) and the consensus Revenue Estimate is $6.28B (+11.5% Y/Y) amid rising oil prices and global equipment shortages persisting thereby sales moving higher to pre-pandemic levels while profit margins displaying a healthy trend.
- Strong results are driven by strong drilling activities in North America, Latin America and the Middle East.
- CEO Olivier Le Peuch believes global demand-led capital spending will drive an exceptional multi-year growth cycle.
- Over the last 2 years, SLB has beaten EPS estimates 100% of the time and has beaten revenue estimates 63% of the time.
- Over the last 3 months, EPS estimates have seen 7 upward revisions and 9 downward. Revenue estimates have seen 8 upward revisions and 6 downward.
- The company plans to boost spending by 18% to $2B in 2022, targeting North American oil explorers who should dominate activity in the first half of the year, followed by international growth in the final six months.
- With an economic recession fear hovering around global conditions, a drop in energy demand is seen likely and also with high exposure to Russia the company is at high risk level; stock has lost 14.6% in past 1-month trading session.
- Of the 29 Wall Street Analysts covering the stock, 16 have assigned a Strong Buy while 10 rate it a Buy rating on the stock.
- Of the 6 Seeking Alpha Authors covering the stock in past 30 days, 4 have rated it a Buy; SA Contributor Gen Alpha recently said, "Schlumberger Is A Bargain Hunter's Dream Stock, Here's Why" .
- Peer companies, Baker Hughes missed expectations for Q2 earnings and revenues as oil price surge benefit was outweighed by component shortages, supply chain inflation and the suspension of its Russian operation.
- Also, Halliburton posted biggest quarterly profit in nearly four years; revenues rose during the quarter while net income dropped.
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Will rising oil prices push Schlumberger's Q2 earnings higher and further support FY22 outlook?