The U.S. shale revival helped Schlumberger (NYSE:SLB) report on Friday its first annual revenue growth for a quarter for the first time in more than two years, but the oilfield services group's Q1 revenues fell slightly short of Wall Street expectations.
Schlumberger booked revenues of $6.894 billion for the first quarter, up 6 percent from the first quarter of 2016, and down 3 percent from the fourth quarter of 2016. Analysts had expected the world's biggest oilfield services group to report revenues of $6.98 billion.
"In the first quarter, the North America land market continued to strengthen in terms of both activity and pricing, leading us to begin accelerating deployment of idle capacity for multiple product lines," Schlumberger Chairman and CEO Paal Kibsgaard said in the press release.
Kibsgaard, however, had a few words of caution for the global oil and gas industry:
"As the recovery builds momentum, industry cash flow and productivity remain under pressure and limit the industry's ability to increase present levels of E&P investment."
Schlumberger's revenues in North America rose 6 percent sequentially in the first quarter, to $1.871 billion, while revenues outside North America, grouped under 'international revenue', dropped by 7 percent, on the back of "greater than expected seasonal decline in activity and sales, particularly in China, Russia land, and the North Sea." Schlumberger also saw lower revenues in key parts of the Middle East and in Ecuador.
Schlumberger had signaled in its Q4 2016 results that increased land activity helped its North American revenue grow. Fourth-quarter revenues slightly beat analyst estimates, after revenue in North America increased by 4 percent sequentially and international revenue ticked up 1 percent.
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For the first quarter this year, Schlumberger posted earnings per share of $0.25, in line with the Zacks Consensus Estimate.
Before Schlumberger's results release, Kevin Simpson, managing director at Griffin Securities, said that the Q1 2017 figures are "going to be a tale of two markets" for Schlumberger international vs. U.S.
By Tsvetana Paraskova for Oilprice.com
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