Schlumberger Limited. (NYSE: SLB) the stock rose 8.12% on January 18th, 2019 (Source: Google finance) after the company posted in line earnings result for the fourth quarter of 2018. The 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
SLB in the fourth quarter of FY 18 has reported the adjusted earnings per share of 36 cents, which is in line the analysts’ estimates for the adjusted earnings per share of 36 cents. The company had reported in the adjusted revenue of $8.2 billion in the fourth quarter of FY 18, beating the analysts’ estimates for revenue of $8.03 billion. The revenue fell sequentially due to lower activity and pricing for most Production- and Cameron-related businesses in North America land. Lower revenue from OneSubsea also drove the decline, but SLB are now close to the cycle trough of backlog-driven activity as the company booked more than $600 million in new project orders during the quarter.
In 2019, SLB 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.
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 has 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.
SLB expect at the current oil prices, 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.