Schlumberger Ltd. (NYSE: SLB – $66.09), the world’s largest oil services company, reported a second-quarter profit that beat expectations, but revenue was a bit shy. Excluding special items, adjusted earnings per share came to $0.43 vs. last year’s $0.35 and a penny above the Street estimates. Revenue grew 11% to $8.30 billion, but short of analysts’ estimates of $8.36 billion. Production revenue rose 30% to $3.26 billion from a year ago, while drilling revenue grew 6% to $2.23 billion. North American revenue grew 43% year on year, but international revenue fell by 1%, primarily due to weakness in the company’s Latin American market. However, this segment picked up steam in the second period vs. the company’s first quarter.
Looking ahead, I expect Schlumberger to continue to benefit from its leading position in the U.S. land drilling market, as well as from its strong international presence. I also believe the company will benefit from the continuation of a more stabilized oil price picture. The company remains one of the best-positioned global oilfield service companies based on its size, scale and differentiated product offerings. Full year earnings should rise to $1.90 per share this year vs. $!.46 in 2017 and $2.80 is the consensus estimate for next year. The shares also deliver a 3% dividend yield while we wait this one out.