Schlumberger (SLB) reported mixed Q3 results Friday. Among fellow oilfield service providers, Baker Hughes (BKR) reported mixed results Wednesday and Halliburton (HAL) reported in-line earnings and revenue Tuesday.
Oil prices have soared over the last month, with U.S. crude rising past $80 per barrel for the first time since 2014. Despite an uptick in demand for oil amid rising Covid-19 vaccinations and declining cases, OPEC+ kept its production increases steady, which added to a looming energy crunch this winter in the U.K. and China.
But analysts don’t expect a big increase in new drilling in the U.S. amid the jump in oil prices as U.S. producers continue to focus on capital discipline.
“Even with higher oil prices, I don’t think we’re going to see another sort of running to the fields and drilling fast,” Chris Midgley, global director of analytics at S&P Global Platts, told reporters during a recent roundtable.
Instead, the focus of larger U.S. producers will be on making sure currently operating wells have increased productivity. Much of the rig count growth will come from smaller players. That could impact oilfield service providers’ Q3 and Q4 results.
Oilfield Service Providers: Schlumberger Earnings
Estimates: FactSet saw Schlumberger earnings jumping 125% to 36 cents a share, with revenue up 13% to $5.94 billion.
Results: Schlumberger reported EPS of 36 cents on revenue of $5.85 billion.
“The industry macro fundamentals have visibly strengthened this year, particularly in recent weeks — with demand recovery, oil and gas commodity prices at recent highs, low inventory levels, and encouraging trends in pandemic containment efforts,” CEO Olivier Le Peuch said in the release. “Absent a recession or pandemic-related setback, these favorable conditions are expected to materially drive investment over the next few years — particularly internationally — and result in exceptional multiyear capital spending growth globally, both on land and offshore.”
Baker Hughes Earnings
Estimates: Zacks analysts saw Baker Hughes earnings per share soaring 450% to 22 cents, with revenue up 6% to $5.35 billion.
Results: Baker Hughes earnings rose, but only to 16 cents a share. Revenue came in at $5.09 billion.
Stock: BKR stock climbed 1.5% to 24.63 Friday after tumbling 5.7% on Wednesday and 4.3% on Thursday, tumbling below below a 25.58 buy point. Baker Hughes stock had finally cleared that cup-with-handle entry on Oct. 12.
Estimates: FactSet analysts saw third-quarter Halliburton earnings of 28 cents per share. Revenue was seen at $3.89 billion.
Results: Halliburton earnings share rose 154% to 28 cents a share adjusted. Revenue climbed 29.5% to $3.86 billion. Completion and production division revenue rose 35% to $2.13 billion and drilling and evaluation unit sales were up 23% to $1.72 billion.
Free cash flow was $469 million.
“I see a multiyear upcycle unfolding,” CEO Jeff Miller said in Tuesday’s release. “Structural global commodity tightness drives increased demand for our services, both internationally and in North America.”
Stock: HAL stock climbed 0.3% to 25.43 Friday. Halliburton stock is in buy range after breaking out of a cup base with a 25.10 entry point, according to MarketSmith analysis. But after running up, especially over the past month, HAL stock could be due for a pullback.
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