Schlumberger reports Q1 EPS ex-integration charges 25c, consensus 25c
Reports Q1 revenue $6.9B, consensus $6.99B. Including Cameron integration charges, EPS was 20c. Schlumberger Chairman and CEO Paal Kibsgaard commented, "In the first quarter, the North America land market continued to strengthen in terms of both activity and pricing, leading us to begin accelerating deployment of idle capacity for multiple product lines. Revenue growth was led by hydraulic fracturing and drilling services, but was also increasingly supported by Artificial Lift, Surface Systems and Valves & Measurement. In spite of our capacity re-activation being heavily back-end loaded toward the end of the quarter as we continued to adhere to our profitable growth approach, we still generated 16% sequential revenue growth and 66% incremental margins in our hydraulic fracturing and directional drilling services in US land. These results were driven by productive customer engagement around pricing recovery and operational efficiency, together with timely resource additions and proactive supply chain engagement. In the international markets, revenue declined 7% sequentially, driven by a greater than expected seasonal decline in activity and sales, particularly in China, Russia land, and the North Sea. In addition, we saw lower sequential activity in key parts of the Middle East, while production constraints imposed on our Schlumberger Production Management Shushufindi project in Ecuador also had a negative impact on our first quarter results. Still, the underlying activity and sentiment from our global customer base were in line with expectations as seen, for instance, by the flat sequential revenue trends in the rest of Latin America as well as in Africa, confirming that these regions have indeed reached the bottom of the cycle. Among the business segments, the first-quarter revenue declines were led by the Cameron Group, which fell 9% sequentially driven by lower project volumes in OneSubsea and reduced product sales in Surface Systems. Reservoir Characterization Group revenue decreased 3% sequentially due to the seasonal reduction in revenue for our Software Integrated Solutions and WesternGeco product lines. Drilling Group and Production Group revenues were each 1% lower sequentially as continued strong growth in hydraulic fracturing and directional drilling activity in North America land was offset by seasonal revenue reductions in the international markets."