SCHLUMBERGER NET INCOME $2.138 BLN

SCHLUMBERGER - Schlumberger Limited (NYSE: SLB)  reported results for full-year 2018 and the fourth quarter of 2018.

Schlumberger Announces Full-Year and Fourth-Quarter 2018 Results

• Full-year revenue of $32.8 billion increased 8% year-on-year

• Full-year GAAP EPS, including charges & credits, was $1.53

• Full-year EPS, excluding charges & credits, of $1.62 increased 8% year-on-year

• Full-year cash flow from operations and free cash flow were $5.7 billion and $2.5 billion, respectively

• Fourth-quarter revenue of $8.2 billion decreased 4% sequentially

• Fourth-quarter GAAP EPS, including charges & credits, was $0.39

• Fourth-quarter EPS, excluding charges & credits, of $0.36 decreased 22% sequentially

• Fourth-quarter cash flow from operations and free cash flow were $2.3 billion and $1.4 billion, respectively

• Quarterly cash dividend of $0.50 per share was approved

Full-Year Results

Schlumberger Chairman and CEO Paal Kibsgaard commented, “Full-year 2018 revenue of $32.8 billion increased 8% year-on-year and grew for the second successive year. Performance was driven by North America where revenue of $12.0 billion increased 26% due to the results of our OneStim^® business, which grew by 41%. Full-year international revenue of $20.4 billion was essentially flat compared with 2017. However, excluding Cameron, international revenue for the second half of 2018 showed year-over-year growth of 3%, marking the beginning of a positive activity trend after three consecutive years of declining revenues.

“Production revenue of $12.4 billion increased 17%, while Drilling revenue of $9.3 billion improved 10%. Reservoir Characterization revenue of $6.5 billion declined 4%, mostly driven by the divestiture of the WesternGeco^® marine seismic acquisition business. Cameron revenue of $5.2 billion declined 1% as a further decline in the long-cycle businesses of OneSubsea^® and Drilling Systems was largely offset by growth in Surface Systems and Valves & Measurement.

“Full-year 2018 pretax operating income of $4.2 billion grew 7%. Pretax operating margin of 13% was essentially flat with the previous year, as the impact of higher revenue was offset by reactivation and mobilization costs associated with the ramp-up and strategic positioning for increased activity in both North America and internationally.

Fourth-Quarter Results

“Fourth-quarter revenue of $8.2 billion declined 4% sequentially driven by lower activity and pricing for most Production- and Cameron-related businesses in North America land. Lower revenue from OneSubsea also drove the decline, but we are now close to the cycle trough of backlog-driven activity as we booked more than $600 million in new project orders during the quarter.

“International activity remained resilient despite the oil price drop, with revenue increasing 1% sequentially. The seasonal slowdown in Russia was offset by increased revenue in the Middle East, Asia, and Africa. Revenue from Europe and Latin America was flat compared with the previous quarter.

“Sequential performance was heavily impacted by Production- and Cameron-related activity in North America land, as seen by the 12% sequential decrease in our consolidated North America revenue. OneStim revenue dropped 25% sequentially as we decided to warm-stack a number of our fleets during the latter part of the quarter, and as we focused on securing dedicated contracts for the first half of 2019 early in the fourth-quarter tendering cycle. Drilling revenue increased 1% sequentially as we continued to mobilize additional drilling rigs for our Integrated Drilling Services (IDS) projects in Norway, Saudi Arabia, India, Argentina, Ecuador, China, and Iraq. Reservoir Characterization revenue decreased 1% sequentially driven by lower Wireline and OneSurface^® revenue and limited year-end sales of Software Integrated Solutions (SIS) software and WesternGeco multiclient seismic licenses. Cameron revenue declined 3% sequentially, mostly due to lower revenue from our OneSubsea and Valves & Measurement product lines.

“From a macro perspective, the dramatic fall in oil prices in the fourth quarter was largely driven by the US shale production surprising to the upside as a result of the surge in activity earlier in the year, and as geopolitics negatively impacted the global demand- and supply-balance sentiments. The combination of these factors, together with a large sell-off in the equity markets due to concerns around global growth and increasing US interest rates, created a near perfect storm to close out 2018.

“Looking forward to 2019, we expect a more positive supply- and demand-balance sentiment to lead to a gradual recovery in the price of oil over the course of the year, as the OPEC and Russia cuts take full effect; the effect of lower activity in North America land in the second half of 2018 impacts production growth; the dispensations from the Iran export sanctions expire and are not renewed; and as the US and China continue to work toward a solution to their ongoing trade dispute.

“In the meantime, the recent oil price volatility has introduced more uncertainty around the E&P spending outlook for 2019, with customers generally taking a more conservative approach at the start of the year. This will once again push out in time the broad-based recovery in E&P spending that we expected only three months ago.

“However, based on our recent discussions with customers, we are seeing clear signs that E&P investments are starting to normalize and reflect a more sustainable financial stewardship of the global resource base. For the North America land E&P operators, this means that future investments will likely be much closer to the level that can be covered by free cash flow. Conversely, in the international markets apart from the Middle East and Russia, after four years of underinvestment and a focus on maximizing cash flow, the NOCs and independents are starting to see the need to invest in their resource base simply to maintain production at current levels.

“For Schlumberger, this means that even with the current oil prices, we expect solid, single-digit growth in the international markets while in North America land, the increased cost of capital and focus on aligning investments closer to free cash flow has introduced more uncertainty to the outlook for both drilling and production activity.

“In this environment, we have built significant flexibility into our operating plan for 2019, which gives us the means and confidence to address any investment and activity scenario. Furthermore, the foundation for our 2019 plans is a clear commitment to generate sufficient cash flow to cover all our business needs, without increasing net debt. After a very strong free cash flow performance in the second half of 2018, we are confident in our ability to further improve our liquidity position in 2019, through our focus on top-line growth, incremental margins, capital discipline, and careful management of working capital.”

Other Events

During the quarter, Schlumberger repurchased 2.1 million shares of its common stock at an average price of $48.44 per share, for a total purchase price of $100 million.

On November 15, 2018, Shearwater GeoServices Holding AS completed the purchase of the WesternGeco marine seismic acquisition assets and operations. Schlumberger received cash consideration of $600 million plus a 15% post-closing equity interest in Shearwater GeoServices Holding AS.

On January 16, 2019, Schlumberger’s Board of Directors approved a quarterly cash dividend of $0.50 per share of outstanding common stock, payable on April 12, 2019 to stockholders of record on February 13, 2019.

More information is here.

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Earlier:

2018, October, 22, 11:40:00 SCHLUMBERGER NET INCOME $644 MLN Schlumberger Announces Third-Quarter 2018 Results Revenue of $8.5 billion increased 2% sequentially Pretax operating income of $1.2 billion increased 5% sequentially EPS was $0.46 Cash flow from operations was $1.8 billion Free cash flow was $1.0 billion

2018, April, 30, 09:31:00 SCHLUMBERGER - EURASIA DEAL REUTERS - Schlumberger had initially planned to buy 51 percent in EDC, but decided to scale down its bid. The deal has faced difficulties as relations between Russia and the United States have deteriorated.

2018, January, 22, 07:40:00 SCHLUMBERGER IS BETTER FT - Excluding those items, earnings per share for the fourth quarter of 2017 were 48 cents, up 78 per cent from the equivalent period of 2016 and above the average forecast of 44 cents.

2018, January, 22, 07:35:00 SCHLUMBERGER NET LOSS $1.5 BLN SCHLUMBERGER - Full-year 2017 revenue of $30.4 billion increased 9% year-on-year. This included a full year’s activity from the acquired Cameron businesses as compared to three quarters of activity in 2016. Excluding the addition of Cameron, revenue growth was driven by land activity in North America, which increased by 82% in line with the increase in rig count. Full-year Production Group revenue increased 21%, Reservoir Characterization Group revenue improved 2%, and Drilling Group revenue declined 2%.

2017, October, 23, 11:10:00 SCHLUMBERGER NET INCOME $545 MLN - Revenue of $7.9 billion increased 6% sequentially - Pretax operating income of $1.1 billion increased 11% sequentially - GAAP EPS, including Cameron integration-related charges of $0.03 per share, was $0.39 - EPS, excluding Cameron integration-related charges, was $0.42 - Cash flow from operations was $1.9 billion; free cash flow was $1.1 billion

2017, September, 4, 12:15:00 SCHLUMBERGER - EURASIA DEAL STOP The acquisition of Russia’s Eurasia Drilling Co (EDC) by U.S. oilfield services giant Schlumberger (SLB.N) has been held up by U.S. sanctions on Russia, Russian Deputy PM Arkady Dvorkovich was quoted as saying by local news services.

2017, July, 24, 13:35:00 SCHLUMBERGER & EURASIA: 51% "I warmly welcome Schlumberger as our majority shareholder. It builds on our strategic alliance with Schlumberger since 2011 and our mutually beneficial business relationship since 2007. The combination of the technology knowhow and operational expertise of Schlumberger coupled to the financial strength of the Investment Funds, brings significant benefits to our customers and the Russian conventional land drilling market."