Is Schlumberger Ready to Run?
Schlumberger (NYSE: SLB) CEO Paal Kibsgaard stated, “Solid activity growth and a consistent focus on execution led to results that continued to strengthen in the second quarter."
Schlumberger, the world's largest oil services company reported a nice earnings upside surprise this morning and is poised to pierce its 200 day moving average.
Second quarter 2012 EPS of $1.05 vs. consensus estimate of $0.998 up from $0.96 in the previous quarter, and $0.86 in the second quarter of 2011. Revenue came in at $10.45 billion up from $9.92 billion last quarter and $8.99 billion Q2 2011.
Growth was apparent both onshore and off, with gains in Latin America (especially Mexico) as well as the Middle east and Asia. Weakened Europe and Chinese uncertainty were mentioned as continuing headwinds. “In the midst of such uncertainty, we are maintaining focus on what we can control, which is the planning and execution of our work. We are currently undertaking further initiatives to extend our leadership in execution and we believe that such actions, together with our international strength and our balanced portfolio in North America, should enable strong relative future performance.”
Schlumberger continued to repurchase 7.5 million shares of their common stock in the quarter and completed the sale of their Wilson distribution business and their stake in CE Franklin to National Oilwell Varco (NYSE: NOV). Continuing to grow through M&A by finalizing the acquisition of SPT Group, the buying GEDCO, the CASING DRILLING division of Tesco Corporation (NASDAQ: TESO), the remaining shares of Radius Service, a 20% minority share in Anton Oilfield Services Group and an interest in the Liquid Robotics Oil & Gas joint venture for autonomous marine vehicles.
Current fundamentals on Schlumberger are good based on yesterday's close and continued strength in the price of oil no doubt will help.
In the pre-market session, SLB is trading well above the 50 day moving average and just under the 200 DMA. A “Gap and Run” scenario off of today's earnings may be confirmed by a close and breakout above the $70 level.
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