10-QPeriod: Q1 FY2014

SLB LIMITED/NV Quarterly Report for Q1 Ended Mar 31, 2014

Filed April 23, 2014For Securities:SLB

Summary

SLB Limited/NV (SLB) reported a strong first quarter for 2014, demonstrating robust revenue and net income growth compared to the prior year. Revenue increased by 6% year-over-year to $11.24 billion, driven by broad-based strength across its operating segments and geographies, particularly in North America and the Middle East & Asia. Net income attributable to Schlumberger surged by 26.5% to $1.59 billion, leading to a significant improvement in diluted earnings per share to $1.21 from $0.94 in the prior year's comparable quarter. The company's operational performance highlights effective cost management and the successful deployment of new technologies, contributing to an expansion in pretax operating margins, especially in international markets.

Financial Highlights

49 data points
Beta

Revenue

$11.24B

22.2% Gross Margin

Net Income

$1.59B

14.2% Net Margin

EPS (Diluted)

$1.21

Total Assets

$66.72B

Cash & Equivalents

$3.75B

Free Cash Flow

$973.00M

Financial Statements
Beta
Revenue$11.24B
Cost of Revenue$8.74B
Gross Profit$2.49B
R&D Expenses$284.00M
Operating Income$1.59B
Interest Expense$103.00M
Net Income$1.59B
EPS (Basic)$1.22
EPS (Diluted)$1.21
Shares Outstanding (Basic)1.31B
Shares Outstanding (Diluted)1.32B

Key Highlights

  • 1Total revenue for Q1 2014 reached $11.24 billion, a 6% increase year-over-year, signaling continued demand for SLB's oilfield services and equipment.
  • 2Net income attributable to Schlumberger was $1.59 billion, a substantial 26.5% increase from $1.26 billion in Q1 2013.
  • 3Diluted earnings per share (EPS) rose to $1.21, up from $0.94 in the prior year's first quarter, indicating improved profitability on a per-share basis.
  • 4The company saw significant revenue growth in the Middle East & Asia (19%) and North America (12%), indicating strong market positions in key energy-producing regions.
  • 5Pretax operating margins expanded year-over-year, particularly in international segments, driven by technology uptake and cost management.
  • 6SLB continued its aggressive share repurchase program, spending $899 million in Q1 2014, reflecting confidence in its financial position and commitment to returning capital to shareholders.
  • 7Cash flow from operations was robust at $1.64 billion, providing ample liquidity to fund capital expenditures and shareholder returns.

Frequently Asked Questions

Revenue growth was driven by increased demand for oilfield services and equipment across various segments and geographies. Key contributors included robust activity in North America, particularly in pressure pumping, and strong performance in the Middle East & Asia. Growth in Reservoir Characterization and Production segments, along with technology uptake and market share gains, also played a significant role.

Profitability improved significantly. Net income attributable to Schlumberger increased by 26.5% to $1.59 billion. This improvement was reflected in diluted earnings per share, which rose to $1.21 from $0.94 in the prior year's first quarter. The company also saw an expansion in pretax operating margins, especially in international markets, due to technology adoption and cost management.

SLB demonstrated a strong commitment to returning capital to shareholders. In the first quarter of 2014, the company repurchased $899 million worth of its shares under its new $10 billion repurchase program, indicating confidence in its financial health and a strategy to enhance shareholder value. Dividend payments also continued.

The report mentions ongoing cooperation with U.S. government agencies regarding a grand jury investigation and regulatory inquiry into historical operations in countries subject to U.S. trade and economic sanctions, the outcome of which is uncertain. Additionally, the company notes potential risks associated with currency devaluation in Venezuela, where it holds significant net monetary assets denominated in local currency.