Schlumberger: Q4-17 and FY-17 Results
Highlights
- Fourth-quarter revenue of $8.2 billion increased 3% sequentially
- Fourth-quarter pretax operating income of $1.2 billion increased 9% sequentially
- Fourth-quarter GAAP loss per share, including charges of $2.11 per share, was $1.63
- Fourth-quarter EPS, excluding charges, was $0.48
- Full-year and fourth-quarter cash flow from operations were $5.7 billion and $2.3 billion, respectively
Full-Year Results
| (Stated in millions, except per share amounts) | ||||||
| Twelve Months Ended | Change | |||||
| Dec. 31, 2017 | Dec. 31, 2016 | Year-on-year | ||||
| Revenue | $30,440 | $27,810 | 9% | |||
| Pretax operating income | $3,921 | $3,273 | 20% | |||
| Pretax operating margin | 12.9% | 11.8% | 111 bps | |||
| Net loss (GAAP basis) | $(1,505) | $(1,687) | n/m | |||
| Net income, excluding charges and credits* | $2,085 | $1,550 | 35% | |||
| Diluted EPS (loss per share) (GAAP basis) | $(1.08) | $(1.24) | n/m | |||
| Diluted EPS, excluding charges and credits* | $1.50 | $1.14 | 32% | |||
| *These are non-GAAP financial measures. See section below entitled “Charges & Credits” for details. n/m=not meaningful |
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Full-year 2017 revenue of $30.4 billion increased 9% year-on-year. This included a full year’s activity from the acquired Cameron businesses as compared to three quarters of activity in 2016. Excluding the addition of Cameron, revenue growth was driven by land activity in North America, which increased by 82% in line with the increase in rig count. Full-year Production Group revenue increased 21%, Reservoir Characterization Group revenue improved 2%, and Drilling Group revenue declined 2%.
Full-year 2017 pretax operating income grew 20% and pretax operating margin of 13% expanded 111 basis points (bps). This was driven by improved profitability in North America due to the growth in land activity that benefited both the Production and Drilling Groups.
Fourth-Quarter Results
| (Stated in millions, except per share amounts) | ||||||
| Three Months Ended | Change | |||||
| Dec. 31, 2017 | Sep. 30, 2017 | Dec. 31, 2016 | Sequential | Year-on-year | ||
| Revenue | $8,179 | $7,905 | $7,107 | 3% | 15% | |
| Pretax operating income | $1,155 | $1,059 | $810 | 9% | 43% | |
| Pretax operating margin | 14.1% | 13.4% | 11.4% | 73 bps | 272 bps | |
| Net income (loss) – (GAAP basis) | $(2,255) | $545 | $(204) | n/m | n/m | |
| Net income, excluding charges and credits* | $668 | $581 | $379 | 15% | 76% | |
| Diluted EPS (loss per share) – GAAP basis | $(1.63) | $0.39 | $(0.15) | n/m | n/m | |
| Diluted EPS, excluding charges and credits* | $0.48 | $0.42 | $0.27 | 14% | 78% | |
| *These are non-GAAP financial measures. See section below entitled “Charges & Credits” for details. n/m=not meaningful |
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Schlumberger Chairman and CEO Paal Kibsgaard commented, “We closed the year with fourth-quarter revenue growing 3% sequentially while pretax operating income rose 9%. Sequential growth was driven by strong activity in North America, Saudi Arabia, and Latin America, while revenue in the Europe, CIS, and Africa Area seasonally declined. Earnings per share of $0.48, excluding charges, were 14% higher than the third quarter.
“Among the business segments, the fourth-quarter revenue increase was led by the Production Group, which grew by 7%. Production Group performance was driven by strong international activity, with more than 20% sequential growth in Saudi Arabia, Russia, and Argentina. In North America land, revenue grew 6% following the redeployment of additional pressure pumping fleets, despite a slight sequential decline in market activity.