24/7 Wall St. » HAL

After the Fall: Value in Oil Stocks (XOM, CVX, BP, SLB, HAL, BHI, VLO, MPC, TSO, OIH, XOP)

Paul Ausick — Tue, 22 May 2012 15:11:04 +0000

The month-long slide in crude oil prices has chopped the share price of many of the biggest names in the oil patch. Exxon Mobil Corp. (NYSE: XOM) is about -4% in the past month, Chevron Corp. (NYSE: CVX) is down -2.8%, BP plc (NYSE: BP) is down more than -9%, Schlumberger Ltd. (NYSE: SLB) is down about -7%, and Halliburton Co. (NYSE: HAL) is down -6.5%. Only Baker Hughes Inc. (NYSE: BHI) shows a gain for the month, up about 3%. For the past three months, however, Baker Hughes is down more than any of the others, off about -20%.

Refiners are no better off: Valero Energy Corp. (NYSE: VLO) is down -7.7% in the past month, Marathon Petroleum Corp. (NYSE: MPC) is down about -9.8%, while Tesoro Corp. (NYSE: TSO) is up a bare 0.4%. Refiners have been surviving off the wide differential between WTI and Brent crudes and as the differential narrows, profits are harder to come by.

For the integrated oil companies, the price of crude has been the determining factor in a company’s profit picture: the higher the price, the bigger the profit. That makes sense. For the services company, higher prices typically mean more work as producers want to get more oil to sell.

Because crude prices are at a seven-month low now, we thought it would be interesting to look for value in some of the big oil stocks. After all, low crude prices mean share sell-offs, so there ought to be some value left on the table.

With the exceptions of Exxon and Chevron, all the companies we looked at have implied gains exceeding 30% if analysts have gotten target prices right. That’s some pretty good value, but we thought we’d try to handicap the race a bit more closely.

Exxon Mobil Corp. (NYSE: XOM) traded at $82.21 and has a market value of $383 billion. The consensus target price from Thomson Reuters is $94.53 and the 52-week range is $67.03 to $87.94. Exxon has a dividend yield of 2.8%. The implied upside to the consensus target is 15%, but we would note that the target is above the 52-week high.

Chevron Corp. (NYSE: CVX) traded at $99.71 and has a market value of $196 billion. The consensus target price from Thomson Reuters is $124.88 and the 52-week range is $86.68 to $112.28. Chevron has a dividend yield of 3.7%. The implied upside to the consensus target is 25%, but we would note again that the target is above the 52-week high.

BP plc (NYSE: BP) traded at $38.26 and has a market value of $121 billion. The consensus target price from Thomson Reuters is $53.25 and the 52-week range is $33.62 to $48.34. BP has a dividend yield of 5.2%. The implied upside to the consensus target is 39%, but we would note again that the target is above the 52-week high.

Schlumberger Ltd. (NYSE: SLB) traded at $67.47 and has a market value of $89 billion. The consensus target price from Thomson Reuters is $89.20 and the 52-week range is $54.79 to $95.53. Schlumberger has a dividend yield of 1.7%. The implied upside to the consensus target is 32%, and the target price is lower than the 52-week high.

Halliburton Co. (NYSE: HAL) traded at $31.40 and has a market value of about $29 billion. The consensus target price from Thomson Reuters is $47.28 and the 52-week range is $27.21 to $57.77. Halliburton has a dividend yield of 1.2%. The implied upside to the consensus target is 51%, and again the target price is lower than the 52-week high.

Baker Hughes Inc. (NYSE: BHI) traded at $42.20 and has a market value of about $18 billion. The consensus target price from Thomson Reuters is $56.33 and the 52-week range is $39.40 to $81.00. Baker Hughes has a dividend yield of 1.5%. The implied upside to the consensus target is 33%, and again the target price is well below the 52-week high.

Valero Energy Co. (NYSE: VLO) traded at $22.17 and has a market value of about $12 billion. The consensus target price from Thomson Reuters is $30.15 and the 52-week range is $16.40 to $28.68. Valero has a dividend yield of 2.8%. The implied upside to the consensus target is 36%, and again the target price is above the 52-week high.

Marathon Petroleum Corp. (NYSE: MPC) traded at $36.38 and has a market value of about $12 billion. The consensus target price from Thomson Reuters is $52.50 and the 52-week range is $26.35 to $47.43. Marathon has a dividend yield of 2.9%. The implied upside to the consensus target is 44%, and again the target price is above the 52-week high.

Tesoro Corp. (NYSE: TSO) traded at $23.49 and has a market value of about $3 billion. The consensus target price from Thomson Reuters is $31.36 and the 52-week range is $17.43 to $30.15. Tesoro does not pay a dividend. The implied upside to the consensus target is 34%, and again the target price is above the 52-week high.

For comparison, The SPDR S&P Oil & Gas Exploration and Production ETF (AMEX: XOP) traded at $50.45 in a 52-week range of $37.67 to $65.58. That’s about 30% below the 52-week high. The Market Vectors Oil Services ETF (AMEX: OIH) traded at $37.47 in a 52-week range of $35.32 to $45.14, again about 30% below the 52-week high.

Target prices for the large integrated oil companies are above 52-week highs, as are target prices for the refiners. Unless the price of crude rises sharply, the targets are out of reach for the integrated companies. For refiners, they’re whipsawed if prices for WTI open a bigger gap versus Brent or if WTI rise and Brent falls. No chance at those targets either way.

Targets for the services companies are lower than 52-week highs, which improves the chances of hitting those targets. Schlumberger, the largest of the services companies, and Baker Hughes both look appear to have the best chance to boost their share prices.

Paul Ausick

Filed under: Analyst Calls, Commodities, Oil & Gas, Trading Alert, Value Investing Tagged: BHI, BP, CVX, HAL, MPC, OIH, SLB, TSO, VLO, XOM, XOP

Chesapeake Gas Well Blow-out in Wyoming Leads to Evacuations (CHK, CEO, HAL)

Paul Ausick — Thu, 26 Apr 2012 18:21:27 +0000

About 70 people have been evacuated from an area within a 5-mile radius of a natural gas well about 10 miles northeast of Douglas, Wyoming, has been leaking mud and natural gas since late Tuesday afternoon. The well is being drilled by Chesapeake Energy Corp. (NYSE: CHK) in a shale gas formation known as the Niobrara, which extends south into Colorado and east into Nebraska. The leak was caused “while technicians were installing a new steel casing on the unit,” according to a report in the local paper, the Douglas Budget.

Chesapeake sold a one-third interest in its Niobrara leaseholds to Cnooc Ltd. (NYSE: CEO), the US arm of China Offshore Oil Co., for about $1.3 billion in January 2011.

According to the Budget, Chesapeake has sought assistance from the Boots & Coots division of Halliburton Co. (NYSE: HAL) in controlling the well.

The horizontal portion of the well had been drilled and the company was installing the well’s casing before the hydraulic fracturing process could begin. Last year Chesapeake had a blowout on a well in the Marcellus shale play in Pennsylvania that resulted in drilling and fracking fluids being spilled.

There is no estimate of the amount of gas leaking into the atmosphere, but there appears to be rather limited danger of explosion.

Paul Ausick

Filed under: China, Oil & Gas Tagged: CEO, CHK, HAL

Baker Hughes, Weatherford Continue Winning Streak for Oilfield Services Companies (BHI, WFT, HAL, SLB, NOV, CHK, OIH)

Paul Ausick — Tue, 24 Apr 2012 16:58:01 +0000

The oilfield services companies are on a roll. Well, sort of. Expectations had been lowered so much coming into this earnings season that every one is able to clear the lowered bar. Baker Hughes Inc. (NYSE: BHI) and Weatherford International Inc. (NYSE: WFT) took their turns today. Last week Halliburton Co. (NYSE: HAL) and Schlumberger Ltd. (NYSE: SLB) made it look easy. National Oilwell Varco Inc. (NYSE: NOV) is scheduled to report before the market opens tomorrow.

The lowered expectations were the result of production slowdowns by natural gas producers like Chesapeake Energy Corp. (NYSE: CHK) that have been bedeviled by low natural gas prices. The slowdown has pushed down rig rates as the services companies seek to keep busy.

Baker Hughes may have been the bigger surprise today. The company had been tamping down EPS expectations for the whole quarter. The initial estimate for first quarter EPS came in at $1.25, gradually sinking to $0.80. Baker Hughes reported EPS of $0.86 today on revenues of $5.36 billion, which also topped the consensus estimate of $5.22 billion.

Weatherford actually missed estimates today, but the company’s upbeat outlook made up for the misses. The company posted adjusted EPS of $0.25 versus an estimate of $0.28. Revenue totaled $3.6 billion versus an estimate of $3.64 billion. Weatherford’s EPS was more than twice what it reported in the same period a year ago and revenues were up 26%.

Weatherford forecast second quarter earnings of $0.24-$0.26, a penny below the consensus estimate of $0.27 and the company expects “modest” revenue and operating income growth for the full year compared with 2011. The company believes it is well-positioned to take advantage of increased activity in Canada and some US oil basins.

Baker Hughes plans to cut capital expenditures by $400 million for the year and the company said it will solve its supply chain issues this quarter. The company did not offer further guidance for the second quarter, but the consensus estimate calls for EPS of $0.77 on revenues of $5.24 billion.

Halliburton and Schlumberger both topped lowered estimates last week, and National Oilwell Varco is slated to post EPS of $1.39 on revenues of $4.29 billion tomorrow. The company’s EPS estimate is actually higher than the initial estimate of $1.36 and the revenue estimate is more than 25% higher than actual revenue in the same period a year ago.

Baker Hughes’ shares are up 6.7% at $43.85 in a 52-week range of $39.40-$81.00.

Weatherford’s shares are up 3.9% at $14.23 in a 52-week range of $10.85-$22.76.

National Oilwell Varco shares are up 1.9% at $78.74 in a 52-week range of $47.97-$87.72.

Halliburton’s shares are up 2.4% at $33.73 in a 52-week range of $27.21-$57.77, and Schlumberger’s shares are up 2.8% at $73.15 in a 52-week range of $54.79-$95.53.

The Market Vectors Oil Services ETF (AMEX: OIH) is up 2% at $40.22 in a 52-week range of $35.80-$45.14.

Paul Ausick

Filed under: Earnings, Oil & Gas Tagged: BHI, CHK, HAL, NOV, OIH, SLB, WFT

Schlumberger Warns on Earnings (SLB, BHI, HAL)

Paul Ausick — Mon, 26 Mar 2012 16:04:57 +0000

At an energy conference in New Orleans today, the CEO of Schlumberger Ltd. (NYSE: SLB) said that downward pressure on prices for the company’s hydraulic fracturing (fracking) services will have a negative impact on the company’s earnings “in this and in the coming quarters.” As rigs are moved from dry gas fields to the more liquids rich fields, costs also rise and utilization rates fall, compounding the profit problems.

Baker Hughes Inc. (NYSE: BHI) warned on corporate earnings last week, leaving only Halliburton Co. (NYSE: HAL) among the big three oil field services companies to remain silent about its prospects.

Shares in Schlumberger are down about -5% at $72.42 in a 52-week range of 54.79-$95.53. Halliburton’s shares are up about 0.8% at $33.67 in a 52-week range of $27.21-$57.77.

Filed under: Earnings Warning, Oil & Gas Tagged: BHI, HAL, SLB

Baker Hughes Slices First Quarter Profit Estimate (BHI, SLB, HAL)

Paul Ausick — Wed, 21 Mar 2012 12:38:32 +0000

Oil field services firm Baker Hughes Inc. (NYSE: BHI) this morning announced that it is cutting its first quarter 2012 operating profit before tax margins in both its US and international operations. The company attributes the reduction to “rapidly changing market conditions in the Pressure Pumping product line in North America and seasonality in all international markets.”

The announcement is likely to affect share prices for Schlumberger Ltd. (NYSE: SLB), Halliburton Co. (NYSE: HAL), and the other services companies. Baker Hughes’ Pressure Pumping division is suffering from a downturn in production of shale gas as producers focus more on extracting higher-priced liquids.

The company’s cuts are significant:

Overall, the company expects North America operating profit before tax margin(1) for the first quarter of 2012 to be between 13.2% and 14.2% compared to 18.7% in the fourth quarter of 2011.

The operating profit before tax margin(1) outlook for international operations for the first quarter of 2012 is expected to be between 12.2% and 13.2% compared to 15.6% in the fourth quarter of 2011 due to seasonality of product sales, weather, geographic mix, and project delays in Latin America.

The company did not provide an EPS estimate. Baker Hughes will report results for its first quarter on April 24th.

Paul Ausick

Filed under: Earnings Warning, Oil & Gas Tagged: BHI, HAL, SLB

Oil Field Services Companies Hit by Weaker Oil Prices (SLB, HAL, BHI, WFT, NOV, RIG)

Paul Ausick — Tue, 06 Mar 2012 18:43:35 +0000

Today’s falling crude prices are having an impact on stocks in the oil field services companies today. Schlumberger Ltd. (NYSE: SLB), Halliburton Co. (NYSE: HAL), Baker Hughes Inc. (NYSE: BHI), Weatherford International Ltd. (NYSE: WFT), National Oilwell Varco Inc. (NYSE: NOV), and Transocean Ltd. (NYSE: RIG) are all down, with Weatherford faring the worst, off -5%.

The selling pressure is a result of the lower forecasts for global economic growth this year, which has had a dampening effect on crude oil prices today. Brent crude is down -1.21% at $122.30/barrel and WTI crude is down -1.66% at $104.95/barrel. Neither price drop is likely to have a significant impact on crude oil production unless today’s economic outlook actually comes true. Even then, the economic hit would have to be more substantial than the -0.3% offered up today for the shrinkage in the eurozone.

China, for example, would have to stick by its forecast of 7.5% GDP growth, and the Chinese are notorious for fiddling with things like bank reserve and lending requirements as the country tries to hit its economic targets. That fiddling very often has unintended consequences that add to market volatility.

The most important factor in crude prices is supply. Not Iran, not speculation, not even global GDP. The central issue for this year is whether or not supply can meet demand. As it stands right now it can, but just barely. A little slowdown won’t hurt producers, and it may even help consumers.

The services companies are all trading well below their target prices and any of the big three — Schlumberger, Halliburton, or Baker Hughes — are reasonable risks given the tight supply/demand situation expected this year.

Paul Ausick

Filed under: 24/7 Wall St. Wire Tagged: BHI, HAL, NOV, RIG, SLB, WFT

24/7 Wall St. Closing Bell (NFLX, PAAS, HAL, HD, KORS, APD, BHI, CLWR, APD, BHI, CLWR, EMC, WDC, CSX, ZION, AAPL, BLRX, LEE, BONT, IDCC, ACHN)

Paul Ausick — Tue, 24 Jan 2012 21:11:04 +0000

All three major equity indexes opened lower this morning and while all have tracked back to last night’s close, only the Nasdaq Composite has managed to wobble to a small gain for the day. The stalled negotiations between Greece and its bondholders are weighing down European markets and the effects are felt on this side of the Atlantic. Earnings reports haven’t boosted the market at all today, even though some have been quite good. The euro has hit $1.30 again. In commodities, WTI crude oil is down -0.51% at $99.07/barrel and Brent crude is down -0.36% at $110.18/barrel. Gold closed off -0.77% at $1,665.30/ounce.

The unofficial closing bells put the DJIA down about 33 points to12,675.75 (-0.26%), the NASDAQ rose just 2 points (0.09%) to 2,786.64, and the S&P 500 fell -0.10% or just more than 1 point to 1,314.63.

There were several analyst upgrades and downgrades today, including Netflix Inc. (NASDAQ: NFLX) maintained as ‘outperform’ with a $100 target price at Credit Suisse; Pan American Silver Corp. (NASDAQ: PAAS) maintained as ‘outperform’ but estimates lowered at Credit Suisse; Halliburton Co. (NYSE: HAL) maintained as ‘buy’ but target price lowered to $54 at Argus; Home Depot Inc. (NYSE: HD) reiterated as ‘buy’ and target price raised to $51 at Argus; ;and Michael Kors Holdings Ltd. (NYSE: KORS) started as ‘overweight’ at Morgan Stanley, as ‘outperform’ at Baird, and as ‘buy’ at Goldman Sachs.

Earnings reports since markets closed on last night have led to some price changes as of the last half hour of trading today: Air Products and Chemicals Inc. (NYSE: APD) is down nearly -3% at $87.29; Baker Hughes Inc. (NYSE: BHI) is down -0.57% at $47.46; Clearwire Corp. (NASDAQ: CLWR) is up 2% at $1.79; EMC Corp. (NYSE: EMC) is up 6.7% at $25.01; Western Digital Corp. (NYSE: WDC) is up 6.2% at $36.85; CSX Corp. (NYSE: CSX) is down -3.5% at $21.89; and Zions Bancorp. (NYSE: ZION) is down -7.6% at $17.15. Apple Inc. (NASDAQ: AAPL) reports earnings after markets close today. See our coverage here.

Other standouts from today include the following stocks:

BioLineRx Ltd. (NASDAQ: BLRX) is up nearly 79% at $5.88 after posting a new 52-week high today of $6.87. The biopharmaceutical company has signed an exclusive worldwide licensing agreement with a French company to develop and market its hepatitis C drug.

Lee Enterprises Inc. (NYSE: LEE) is up more than 26% at $1.39. The newspaper company has been granted permission to exit bankruptcy protection.

The Bon-Ton Stores Inc. (NASDAQ: BONT) is up nearly 18% at $3.81. The department store operator has hired a new CEO who was previously the CEO at Lord & Taylor, before that chain was acquired by a Canadian company.

InterDigital Inc. (NASDAQ: IDCC) is down nearly -20% at $35.68. The wireless technology developed has shut down its “strategic review” without finding a buyer and will continue to seek additional patent sales and licensing agreements.

Achillion Pharmaceuticals Inc. (NASDAQ: ACHN) is up more than 17% at $10.79. The drug company, which is developing its own hepatitis C drug, is enjoying a halo effect from BioLineRx’s announcement.

Stay tuned for Wednesday. President Barack Obama delivers his state of the union address at 9:00 P.M ET tonight. We have noted the following events on the schedule (all times Eastern):

7:00 a.m. – Mortgage Bankers Association purchase applications
10:00 a.m. – Federal Housing Finance Agency (FHFA) house price index
10:30 a.m. – EIA weekly petroleum status report
10:30 a.m. – 5-year Treasury note auction
2:15 p.m. – Fed chairman Ben Bernanke press conference

Paul Ausick

Filed under: HI/LOW, Market Close, The Day Tagged: AAPL, ACHN, APD, BHI, BLRX, BONT, CLWR, CSX, EMC, HAL, HD, IDCC, KORS, LEE, NFLX, PAAS, WDC, ZION

Top Analyst Upgrades & Downgrades (CAL, HAL, HMY, HD, IBI, KLAC, KORS, NFLX, NIHD, NVLS, PAAS, TXN, UNP, ZUMZ)

Administrator — Tue, 24 Jan 2012 13:14:33 +0000

These are some of the top analyst upgrades, downgrades, and initiations seen from Wall Street brokerage and research firms this Tuesday morning.

Caterpillar, Inc. (NYSE: CAT) Raised to Outperform as Bull of the Day at Zacks.
Halliburton Co. (NYSE: HAL) Reiterated Buy but lowered target to $54 at Argus.
Harmony Gold Mining Co. Ltd. (NYSE: HMY) Raised to Buy at UBS.
Home Depot Inc. (NYSE: HD) Reiterated Buy and raised price target to $51 at Argus.
Interline Brands, Inc. (NYSE: IBI) named as Value stock of the day at Zacks.
KLA-Tencor Corporation (NASDAQ: KLAC) Raised to Buy at Citigroup.
Michael Kors Holdings Limited (NYSE: KORS) Started as Overweight at Morgan Stanley; Started as Outperform at Baird; Started as Buy at Goldman Sachs.
Netflix, Inc. (NASDAQ: NFLX) Maintained Outperform with $100 target at Credit Suisse.
NII Holdings, Inc. (NASDAQ: NIHD) Cut to Underperform as Bear of the Day at Zacks.
Novellus Systems, Inc. (NASDAQ: NVLS) Raised to Buy at Citigroup.
Pan American Silver Corp. (NASDAQ: PAAS) maintained Outperform but lowered estimates at Credit Suisse.
Texas Instruments Inc. (NYSE: TXN) Reiterated Outperform and raised target to $40 at Credit Suisse; Cut to Hold at Kaufman Bros.
Union Pacific Corp. (NYSE: UNP) Reiterated Buy and raised target to $130 at Argus.
Zumiez Inc. (NASDAQ: ZUMZ) Cut to Neutral at Credit Suisse.

If you enjoyed the top analyst calls, you can sign up in the box below to join our morning email list to receive news directly in your inbox each morning. We include major analyst upgrades and downgrades, IPO and M&A news, special situation developments, observations on Warren Buffett and key market gurus, as well as special exclusive feature stories.

JON C. OGG

Filed under: Analyst Calls Tagged: CAL, HAL, HD, HMY, IBI, KLAC, KORS, NFLX, NIHD, NVLS, PAAS, TXN, UNP, ZUMZ

24/7 Wall St. Closing Bell (COP, SIRI, GOOG, PG, AMGN, HAL, TWIN, PETS, MFN, GDP, CBRX, SR, RIMG)

Paul Ausick — Mon, 23 Jan 2012 21:08:11 +0000

Equity markets opened slightly higher this morning but trailed off to negative territory in the late morning. By late afternoon, the NASDAQ composite and the S&P 500 were flirting with a positive result. Continuing talks between the Greek government and the country’s bondholders have not made any progress, and the imposition of an embargo on Iranian oil and other sanctions have been approved by the European Union. Some in Iran are making more threats to close the Strait of Hormuz, which has sent crude prices higher today. WTI crude is up 1.58% at $99.88/barrel and Brent crude is up 0.91% at $110.86/barrel. Gold has risen to $1,672.60/ounce, up 0.75% on the day.

The unofficial closing bells put the DJIA down nearly 12 points to 12,708.82 (-0.09%), the NASDAQ fell more than 2 points (-0.09%) to 2,784.17, and the S&P 500 rose 0.05% or less than 1 point to 1,316.00.

There were several analyst upgrades and downgrades today, including ConocoPhillips (NYSE: COP) cut to ‘sell’ at UBS; Sirius XM Radion Inc. (NASDAQ: SIRI) cut to ‘equal weight at Morgan Stanely; Google Inc. (NASDAQ: GOOG) reiterated as ‘buy’ with a $730 target price at Argus; Proctor & Gamble (NYSE: PG) cut to ‘hold’ at Stifel Nicolaus; and Amgen Inc. (NASDAQ: AMGN) cut to ‘neutral’ at JPMorgan.

Earnings reports since markets closed on Friday have led to some price changes as of the last half hour of trading today: Halliburton Co. (NYSE: HAL) is up XX% at $XX; Twin Disc Inc. (NASDAQ: TWIN) is down -XX% at $XX; and PetsMed Express Inc. (NASDAQ: PETS) is up XX% at $XX. We also have a rundown of the 11 stocks included in the DJIA that will be reporting earnings this week.

Other standouts from today include the following stocks:

Minefinders Corp. Ltd. (AMEX: MFN) is up nearly 23% at $13.94. The Canadian silver miner is being acquired by Pan American Silver Corp. (NASDAQ: PAAS) for CDN$1.5 billion.

Goodrich Petroleum Corp. (NYSE: GDP) is up more than 12% at $15.76. The natural gas producer is the biggest gainer among natural gas drillers following an announcement from Chesapeake Energy Corp. (NYSE: CHK) that it was reducing production this year.

Columbia Laboratories Inc. (NASDAQ: CBRX) is down more than -54% at $0.72 after posting a new 52-week low of $0.64 earlier today. The drug company’s progesterone vaginal gel was not approved by a committee of the US FDA.

The Standard Register Co. (NYSE: SR) is down nearly -14% at $2.18, a new 52-week low. The printing and services company announced that it would reduce its workforce by 15% and take other measures in a restructuring of the company. Layoffs would affect about 390 workers.

Rimage Corp. (NASDAQ: RIMG) is down nearly -11% at $11.77. The digital publishing provider lowered its fourth-quarter earnings and revenue forecasts.

Stay tuned for Tuesday. The Federal Reserve’s open market committee meeting starts tomorrow, with a press conference with Fed chairman Ben Bernancke following at 2:30 p.m. ET. President Barack Obama delivers his state of the union address at 9:00 P.M ET. We have noted the following events on the schedule (all times Eastern):

11:30 a.m. – 4-week Treasury bill auction
1:00 p.m. – 2-year Treasury note auction

Paul Ausick

Filed under: HI/LOW, Market Close, The Day Tagged: AMGN, CBRX, COP, GDP, GOOG, HAL, MFN, PETS, PG, RIMG, SIRI, SR, TWIN

Schlumberger Tops Estimates (SLB, HAL, BHI)

Paul Ausick — Fri, 20 Jan 2012 12:33:37 +0000

The first of the big oil field services to report quarterly earnings is also the largest: Schlumberger Ltd. For the full fiscal year, the company reported revenue of $39.54 billion and diluted, adjusted EPS of $3.66. That’s a revenue jump of 44% over 2010 and an EPS jump of 28%. Analysts were expecting revenue of $39.34 and EPS of $3.63.

Competitors Halliburton Co. (NYSE: HAL) and Baker Hughes Inc. (NYSE: BHI) report results next week. Halliburton is expected to post annual EPS of $3.35 on revenue of $24.58 billion and Baker Hughes is expected to post annual EPS of $4.30 on revenue of $19.90 billion.

For the fourth quarter, Schlumberger posted diluted, adjusted EPS of $1.11 on revenue of $10.97 billion. The consensus estimate called for EPS of $1.09 on revenue of $10.78 billion.

Drilling in the Gulf of Mexico showed the strongest growth in the company’s North American region. Internationally, deepwater drilling offshore of North and West Africa grew most. Schlumberger also showed solid growth in drilling in the Middle East, particularly Iraq.

Here’s what the company had to say about its prospects in 2012:

Uncertainty remains over the outlook for 2012 due to the continuing sovereign debt crisis in Europe which places downward pressure on GDP and oil demand forecasts. Natural gas markets are well supplied in North America with gas storage well above five-year highs. In this environment, the thin excess oil supply cushion is expected to support oil prices close to current levels, while global demand for LNG continues to increase. Recent E&P customer spending forecasts also point to higher E&P investment in 2012, particularly in international markets.

The company is planning on growth in 2012, but did not provide specifics in its quarterly report.

Filed under: Earnings, Oil & Gas Tagged: BHI, HAL, SLB