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Schlumberger Ltd SLB

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Morningstar’s Analysis

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1-Star Price

PREMIUM

5-Star Price

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Economic Moat

PREMIUM

Capital Allocation

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Schlumberger Reports Solid Fourth-Quarter Results as Industry Recovery Is Underway

Preston Caldwell Equity Analyst

Analyst Note

| Preston Caldwell |

Schlumberger posted 5% sequential revenue improvement in the fourth quarter, lead by a 13% improvement in North America markets, driven by a rebound in industry activity. International revenue was up 3%, actually outperforming peers' international results, which have been flat-to-down so far. Adjusted EBITDA margins improved to 20.1% from 19.4% in the prior quarter and impressively stand about flat versus year-ago (i.e. pre-pandemic) levels. This strong bottom-line performance is attributable to aggressive cost-cutting. Our fair value estimate and narrow moat rating are unchanged following the results.

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Company Profile

Business Description

Schlumberger is the world’s largest supplier of products and services to the oil and gas industry. The company operates its business via multiple groups: reservoir characterization, drilling, production, and Cameron. It is investing more than any other services firm to make its offerings more bundled, which it believes is likely to be one of the key industry trends during the next 10 years. Efforts on this front are most visible via the Schlumberger Production Management business, which now accounts for 10% of its revenue.

Contact
5599 San Felipe, 17th Floor
Houston, TX, 77056, Curaçao
T +1 713 513-2000
Sector Energy
Industry Oil & Gas Equipment & Services
Most Recent Earnings Dec 31, 2020
Fiscal Year End Dec 31, 2020
Stock Type
Employees 86,000

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