Schlumberger, Ltd. (NYSE: SLB – $63.01) posted a larger quarterly profit for the third quarter, as its North American business continues to be helped by strong shale drilling. Net profit attributable to the Houston-based oilfield services company rose to $545 million, and adjusted earnings per share before integration charges related to the Cameron acquisition was $0.42 per share from $0.13 per share last year and in line with Street views. Revenue rose to $7.91 billion from $7.02 billion in the same quarter last year. Growth in the third quarter was again led by the company’s North America Land GeoMarket, where it continued to gain market share in both hydraulic fracturing and drilling services despite the decelerating rig count growth. Schlumberger also saw strong sequential activity growth in Russia, the North Sea and Asia, while activity in the rest of the world was largely flat compared with the second quarter.
Management believes it will remain on track to achieve its cash flow generation target for the year. However, there is still pricing pressure in new bids from oil producers, but the downward trend of pricing is slowing significantly in international markets. In North America the company expects services to grow moderately, as energy companies increasingly have shied away from chasing higher production at the cost of financial returns. U.S. rig counts have been falling for several weeks and recently hit a four-month low, while production has grown at a slower rate than the U.S. Energy Information Administration’s estimate. For the year, SLB still may be able to earn $1.51 and $2.30 is tentative for 2018. The shares can continue to be held for recovery.