10-QPeriod: Q1 FY2011

SLB LIMITED/NV Quarterly Report for Q1 Ended Mar 31, 2011

Filed April 27, 2011For Securities:SLB

Summary

SLB LIMITED/NV (SLB) reported strong financial performance for the first quarter of 2011, with a significant increase in revenue and earnings compared to the same period in the prior year. This growth was largely driven by the recent acquisitions of Smith International and Geoservices, which expanded the company's offerings and market reach. Revenue surged due to improved activity and pricing across various segments, particularly in North America, despite some headwinds from geopolitical events and weather. Profitability also saw a substantial boost, with net income and earnings per share demonstrating robust year-over-year growth. The company's strategic integration of new businesses and its focus on technological innovation appear to be paying off, positioning SLB favorably in a dynamic global energy market. While the company acknowledges potential risks from regional instability and economic conditions, its financial position remains strong, supported by significant cash reserves and available credit facilities.

Financial Highlights

50 data points
Beta

Revenue

$8.72B

Net Income

$944.00M

10.8% Net Margin

EPS (Diluted)

$0.69

Total Assets

$52.37B

Cash & Equivalents

$1.48B

Free Cash Flow

$66.00M

Financial Statements
Beta
Revenue$8.72B
R&D Expenses$254.00M
Operating Income$944.00M
Interest Expense$73.00M
Net Income$944.00M
EPS (Basic)$0.69
EPS (Diluted)$0.69
Shares Outstanding (Basic)1.36B
Shares Outstanding (Diluted)1.38B

Key Highlights

  • 1Revenue for the first quarter of 2011 increased by 45% year-over-year to $8.716 billion, driven by acquisitions and improved market conditions.
  • 2Net income attributable to Schlumberger rose significantly to $1.238 billion, a substantial increase from $1.036 billion in Q1 2010.
  • 3Diluted earnings per share (EPS) increased to $0.69 in Q1 2011, up from $0.56 in Q1 2010, reflecting strong profitability.
  • 4The company incurred $34 million in merger and integration-related charges in Q1 2011 related to the acquisitions of Smith and Geoservices.
  • 5Cash flow from operating activities was $0.8 billion in Q1 2011, compared to $1.0 billion in Q1 2010, reflecting increased working capital requirements.
  • 6Capital expenditures increased significantly to $0.8 billion in Q1 2011, from $0.4 billion in Q1 2010, indicating investment in future growth.
  • 7SLB completed the divestiture of its Global Connectivity Services business on April 5, 2011, for $397.5 million in cash.

Frequently Asked Questions

The primary drivers of revenue growth were the acquisitions of Smith International and Geoservices, which significantly expanded the company's operational capabilities and market presence. Additionally, improved activity and pricing for Well Services technologies, particularly in North America, contributed substantially to the revenue increase. Growth was also observed across various geographical areas, with North America showing notable expansion.

Profitability saw a significant improvement. Net income attributable to Schlumberger increased to $1.238 billion in the first quarter of 2011, up from $1.036 billion in the same period of 2010. Diluted earnings per share also rose to $0.69 from $0.56, demonstrating strong operational performance and effective integration of acquired businesses.

Yes, SLB recorded $34 million in pretax merger and integration-related charges in the first quarter of 2011, stemming from the acquisitions of Smith and Geoservices. In the prior year's first quarter, charges related to merger costs and the impact of the elimination of tax deductibility for retiree prescription drug benefits amounted to $35 million. These charges are detailed in the financial statements.

SLB anticipates that high oil prices, coupled with increasing demand from global recovery and the absence of significant spare production capacity, will drive substantial investment in exploration and production. The company expects increased drilling activity, particularly in North America's liquid-rich plays and deepwater projects, as well as growing activity in the Middle East. SLB is well-positioned to capitalize on these trends with its advanced technology, equipment, and personnel.