Schlumberger Ltd. (NYSE: SLB) reported first-quarter 2017 results before markets opened on Friday. The oil field services firm reported adjusted diluted earnings per share (EPS) of $0.25 on revenues of $6.89 billion. In the same period a year ago, it reported adjusted EPS of $0.40 on revenues of $6.52 billion. First-quarter results also compare to the consensus estimates for EPS of $0.25 on revenues of $6.99 billion.

On a GAAP basis, Schlumberger posted quarterly EPS of $0.20, compared with $0.40 in the first quarter of 2016.

Pretax operating margin dipped from 13.8% in the year-ago quarter to 11% in the first quarter of 2017, and pretax operating income slipped 7% to $757 million year over year.

CEO Paal Kibsgaard touted Schlumberger’s 16% sequential revenue growth and 66% incremental margins in its U.S. fracking and directional drilling services.

North American revenues rose 6% sequentially to $1.87 billion, while revenues in Latin America were flat, they fell 10% in Europe/Confederation of Independent States (Russia et al.)/Africa, and fell 7% in the Middle East/Asia region. Overall, international revenue fell 7%.

The CEO counts himself and the company as among those concerned about the lack of exploration for new reserves:

While our view of the fundamentals of supply and demand in the oil markets remains constructive, the continuing underinvestment in new supply is increasing the likelihood of a medium-term supply deficit as reservoirs are produced but reserves are not replaced in sufficient volume. In particular, the market continues to focus on headline decline numbers, suggesting that production is holding up well. However, a closer examination of the underlying data clearly shows that the rate of depletion of proven developed reserves is rapidly accelerating in several key non-OPEC countries.

As the recovery builds momentum, industry cash flow and productivity remain under pressure and limit the industry’s ability to increase present levels of E&P investment. At the same time, the value chain remains focused on trying to capture the limited value that is created, rather than seeking new ways to collectively create more value. This approach is not sustainable, either from addressing the underlying industry challenges or from ensuring that the future supply of hydrocarbons can meet the projected growth in demand.

During the first quarter, Schlumberger repurchased 4.7 million shares of stock at an average price of $78.97 per share for a total cost of $372 million.

Schlumberger did not offer guidance in its press release, but consensus estimates call for second quarter EPS of $0.35 and revenues of $7.4 billion. For the full year, EPS is forecast at $1.70 on revenues of $30.85 billion.

Shares traded down about 0.5% in Friday’s premarket at $76.28. The stock’s 52-week range is $72.00 to $87.84. The 12-month consensus price target was $95.58 before results were announced. Since reporting fourth-quarter results in January, Schlumberger stock has lost just more than $10 per share.

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