Summary
SLB LIMITED/NV (SLB) reported its first quarter 2016 results, showing a significant decline in revenue and net income compared to the same period in 2015. Revenue decreased by 36% year-over-year to $6.52 billion, and net income attributable to Schlumberger fell by 49% to $501 million. This downturn reflects the challenging operating environment in the oil and gas industry, characterized by drastic cuts in customer spending, activity disruptions, and pricing pressure, particularly in North America. Despite these headwinds, the company continued its strategic capital allocation, repurchasing shares and managing its debt levels effectively. An extremely significant development for the company, though not reflected in these Q1 2016 results as it closed on April 1, 2016, was the acquisition of Cameron International Corporation for approximately $12.9 billion. This merger is expected to create a comprehensive technology portfolio spanning the entire oil and gas lifecycle. While the current quarter demonstrates the ongoing industry downturn, the strategic acquisition of Cameron signals a strong focus on long-term value creation and market leadership through technological integration and expanded service offerings.
Financial Highlights
50 data points| Revenue | $6.52B |
| Cost of Revenue | $5.46B |
| Gross Profit | $1.06B |
| R&D Expenses | $240.00M |
| Operating Income | $901.00M |
| Interest Expense | $133.00M |
| Net Income | $501.00M |
| EPS (Basic) | $0.40 |
| EPS (Diluted) | $0.40 |
| Shares Outstanding (Basic) | 1.25B |
| Shares Outstanding (Diluted) | 1.26B |
Key Highlights
- 1Revenue for Q1 2016 was $6.52 billion, a 36% decrease from $10.25 billion in Q1 2015, reflecting the severe downturn in the oil and gas industry.
- 2Net income attributable to Schlumberger decreased by 49% to $501 million ($0.40 per diluted share) in Q1 2016, down from $975 million ($0.76 per diluted share) in Q1 2015.
- 3North America revenue saw a significant year-over-year decline of 55% to $1.46 billion, driven by a 62% drop in the US land rig count.
- 4The company repurchased $475 million of its stock in Q1 2016, continuing its capital return strategy.
- 5Total debt increased to $17.23 billion at March 31, 2016, from $14.44 billion at December 31, 2015, partly due to commercial paper borrowings.
- 6A major strategic event, the acquisition of Cameron International Corporation for approximately $12.9 billion, closed on April 1, 2016, and is expected to enhance technology-driven growth, though it is not reflected in these Q1 2016 financial statements.
- 7The company experienced a significant decrease in pretax operating income margin to 13.8% in Q1 2016, down from 29.3% in Q1 2015, with North America reporting a negative margin of -1%.