Thursday, July 17, 2008

Schlumberger Q2 Preview

SLB reports Q2 tomorrow at 9am: SLB Preview: Good for the Long Haul

Schlumberger, the premier oilfield services company, is scheduled to report its second-quarter results and conduct its quarterly conference call before the market opens on Friday. The company is expected to earn $1.12 per share on revenue of $6.48 billion. In the year-ago quarter, Schlumberger earned $1.02 on revenue of $5.64 billion. Just yesterday, Morgan Stanley raised its 2010 price target on Schlumberger to $155 from $145. The analyst report started by saying, "Structurally positive fundamentals in the global oil services space, at a time of broad based stock market turmoil, has provided a series of attractive entry points." I fully agree with this assessment on the space. Here are a few points I want to highlight in making the bullish case for Schlumberger: Rig counts are on the rise, and my research indicates that 2008 will be back-end loaded. This is going to provide huge bottom-line benefits.
Additionally, Jefferies believes Schlumberger's entire sector is oversold going into Q2 results.

1 comment:

Anaconda said...


Oilfield services companies are in the business to "assist" other companies in the exploration & production of oil.

That's their business.

So, if oil was on the way out like the "peak" oil pushers claim, why would companies like Schlumberger being doing so well?

After all, if there wasn't much oil left, it wouldn't matter where the price of oil is at, rather, there is lots of oil, but you have to have technology to get it.

That's what these oilfield services companies have -- deepwater, deep-drilling technology.

That's where the big plays of oil are at these days, and the surface has barely been scratched.

The "big boys" know there is oil to get -- they aren't bidding up day rates on a lark.

The "big boys" are bidding up day rates because "somebody smart" is telling them oil is down there to get.

That's "common sense."