Schlumberger Ltd. (SLB) Shares Rise on 'Excellent' Second Quarter Performance

Schlumberger Ltd. (NYSE: SLB), the oilfield services company, reported earnings for its latest quarter on Friday, beating analyst earnings and revenue expectations, sending its stock 4% higher.

The company posted earnings per share of $0.5 on revenue of $6.77 billion, topping analyst consensus expectations of $0.4 on revenue of $6.27 billion.

Following the report, analysts at Stifel and Goldman Sachs released notes, providing positive commentary on the company.

Stifel analyst Stephen Gengaro, who has a Buy rating on the stock, said, "SLB delivered very strong 2Q22 results and increased 2022 revenue expectations. The excellent 2Q22 performance was fueled by better-than-expected revenue in each geography and each operating segment, and operating margins exceeded our forecast across the board."

"Management reiterated its expectation for a multi-year up-cycle, and noted that despite near-term economic concerns, energy security, high commodity prices, and an urgency to grow global oil and gas production are positives in 2022 and beyond. Management now expects full-year revenue to increase in the “high teens” versus the “mid teens” previously, which equates to at least $27 billion versus our current $26.2 billion forecast. We expect the shares to react very well to the print," he added.

Meanwhile, Goldman Sachs analyst Neil Mehta, who also has a Buy rating on Schlumberger shares, told investors the company "reported adjusted EBITDA of $1,530 mil, 12% above our estimate of $1,366 mil and FactSet consensus of $1,361 mil. This was largely driven by an 8% beat in overall revenue ($6.8 bil vs $6.3 bil GS) and ~84 bps beat on EBITDA margins (22.6% vs 21.7% GS) vs our estimates. The higher revenue was driven by Production Systems (+10.4% vs GS), Well Construction (+8.7% vs GS), Digital and Integration (+7.2% vs GS), and Reservoir Performance (+2.3% vs GS)."

By Sam Boughedda

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