Schlumberger: Announces Q3-17 results
Highlights
- Revenue of $7.9 billion increased 6% sequentially
- Pretax operating income of $1.1 billion increased 11% sequentially
- GAAP EPS, including Cameron integration-related charges of $0.03 per share, was $0.39
- EPS, excluding Cameron integration-related charges, was $0.42
- Cash flow from operations was $1.9 billion; free cash flow was $1.1 billion
WesternGeco Highlights
Offshore Malaysia, WesternGeco completed a hybrid seismic acquisition survey for Roc Oil (Sarawak) Sdn Bhd using a newly deployed multipurpose vessel (MPV)—a first in the industry. The 340-km2 3D seismic survey was acquired offshore Sarawak, Malaysia, using a triple source array with simultaneous recording by a towed-streamer spread and ocean-bottom nodes to overcome existing platform obstructions—all from a single seismic vessel. The WG Vespucci MPV acquired the high-quality ocean-bottom seismic data to supplement the streamer seismic data without having to employ multiple acquisition vessels and crews, resulting in cost reduction and greater efficiency while achieving the survey objectives.
Offshore Korea, WesternGeco introduced IsoMetrix* marine isometric seismic technology to conduct a high-resolution broadband seismic survey for the Korea National Oil Corporation over the company’s largest hydrocarbon production field near Busan. The survey was in a complex environment that included shipping traffic and dense fishing activity, and had a narrow time frame for completion due to weather concerns.
Financial and Operational
Schlumberger Limited (NYSE:SLB) today reported results for the third quarter of 2017.
| (Stated in millions, except per share amounts) | ||||||
| Three Months Ended | Change | |||||
| Sept. 30, 2017 | Jun. 30, 2017 | Sept. 30, 2016 | Sequential | Year-on-year | ||
| Revenue | $7,905 | $7,462 | $7,019 | 6% | 13% | |
| Pretax operating income | $1,059 | $950 | $815 | 11% | 30% | |
| Pretax operating margin | 13.4% | 12.7% | 11.6% | 66 bps | 178 bps | |
| Net income (loss) (GAAP basis) | $545 | $(74) | $176 | n/m | 209% | |
| Net income, excluding charges and credits* | $581 | $488 | $353 | 19% | 65% | |
| Diluted EPS (loss per share) (GAAP basis) | $0.39 | $(0.05) | $0.13 | n/m | 200% | |
| Diluted EPS, excluding charges and credits* | $0.42 | $0.35 | $0.25 | 20% | 68% | |
| *These are non-GAAP financial measures. See section entitled “Charges & Credits” for details. n/m=not meaningful |
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Schlumberger Chairman and CEO Paal Kibsgaard commented, “Our third-quarter revenue increased 6% sequentially while pretax operating income rose by 11%, resulting in EPS, excluding Cameron integration charges, of $0.42, which was 20% higher than the second quarter.
“Activity growth in the third quarter was again led by our North America Land GeoMarket, where we continued to gain market share in both hydraulic fracturing and drilling services despite the decelerating rig count growth. We also saw strong sequential activity growth in Russia, the North Sea, and Asia, while our activity in the rest of the world was largely flat compared with the second quarter.
“From a technology standpoint, revenue growth was driven by the Production Group, which increased 15% sequentially from continued share gains in the hydraulic fracturing market in North America land as well as from increased unconventional resources project activity in the Middle East. Reservoir Characterization Group revenue increased 1% as strong Wireline activity in Russia and the North Sea was partly offset by lower exploration-related activity for WesternGeco. Cameron Group revenue increased 3% driven by higher product sales for Surface Systems in North America land. Drilling Group revenue grew 1% as we remained sold out on PowerDrive Orbit* technology in North America land and completed key Integrated Drilling Services (IDS) projects in Mexico and Iraq that will not resume until early 2018.
“Geographically, North America revenue increased 18% as we continued the high redeployment rate of our spare hydraulic fracturing capacity. North America land revenue grew 23% sequentially, significantly outpacing the 12% increase in rig count, with hydraulic fracturing revenue growing 42%. Over the past six months, we have more than doubled the number of active fracturing fleets in North America land and have now redeployed almost all available capacity. This generated transitory costs and inefficiencies across field operations and in our distribution network, which will be addressed during the fourth quarter. In the US Gulf of Mexico, activity continued to weaken in the third quarter, and the outlook remains bleak for this region based on current customer plans.
“In the international markets, revenue was essentially flat with the second quarter, with Europe/CIS/Africa growing 5% due to strong summer activity in the Russia & Central Asia, United Kingdom & Continental Europe, and Norway & Denmark GeoMarkets. Middle East & Asia revenue was flat sequentially as the growth contributed by the Saudi Arabia & Bahrain, Far East & Australia, and South & East Asia GeoMarkets was offset by a decline in Iraq following the completion of an IDS project. Latin America revenue declined 8% driven by lower multiclient seismic license sales and the completion of IDS projects in the Mexico & Central America GeoMarket.