10-QPeriod: Q2 FY2018

SLB LIMITED/NV Quarterly Report for Q2 Ended Jun 30, 2018

Filed July 25, 2018For Securities:SLB

Summary

SLB LIMITED/NV (SLB) reported its second quarter 2018 financial results, showing a significant increase in revenue compared to the prior year. Total revenue for the second quarter of 2018 reached $8.3 billion, an 11% increase from $7.5 billion in the second quarter of 2017. This growth was primarily driven by strong performance in the Production and Drilling segments, particularly due to accelerated land activity in North America. The company's net income for the quarter, however, showed a substantial decline, reporting a net loss attributable to Schlumberger of $74 million compared to a net income of $276 million in the same period last year, resulting in a basic earnings per share of $0.31 for Q2 2018 versus $0.15 for Q2 2017. Despite the net loss, the operational performance indicated a positive trend in revenue and segment-level profitability, with pretax operating margin remaining stable year-over-year. Investors should note the significant charges and credits impacting net income, particularly a $184 million pretax charge for headcount reductions in Q2 2018 and prior year charges related to Venezuela receivables and merger integration costs.

Financial Highlights

46 data points
Beta

Revenue

$8.30B

Net Income

$430.00M

5.2% Net Margin

EPS (Diluted)

$0.31

Total Assets

$70.16B

Cash & Equivalents

$1.46B

Free Cash Flow

$467.00M

Financial Statements
Beta
Revenue$8.30B
R&D Expenses$175.00M
Operating Income$1.09B
Interest Expense$144.00M
Net Income$430.00M
EPS (Basic)$0.31
EPS (Diluted)$0.31
Shares Outstanding (Basic)1.38B
Shares Outstanding (Diluted)1.39B

Key Highlights

  • 1Total revenue increased by 11% year-over-year to $8.3 billion in Q2 2018.
  • 2Production segment revenue grew by 30%, driven by accelerated land activity in North America.
  • 3Drilling segment revenue increased by 6%, supported by higher demand for directional drilling technologies.
  • 4Reported a net loss attributable to Schlumberger of $74 million in Q2 2018, a significant decrease from a net profit in Q2 2017.
  • 5Basic earnings per share were $0.31 in Q2 2018, compared to $0.15 in Q2 2017.
  • 6Recorded a $184 million pretax charge in Q2 2018 related to headcount reductions.
  • 7North America revenue saw a substantial increase of 42% in Q2 2018 compared to Q2 2017.

Frequently Asked Questions

The increase in revenue was primarily driven by strong performance in the Production segment, which saw a 30% rise due to accelerated land activity in North America, including increased capacity, market share gains, and improved pricing. The Drilling segment also contributed positively with a 6% revenue increase, benefiting from higher demand for directional drilling technologies in North America and new international project starts.

The company reported a net loss attributable to Schlumberger of $74 million in Q2 2018 primarily due to significant charges and credits. In Q2 2018, a pretax charge of $184 million ($164 million after-tax) was recorded for headcount reductions. While revenue and operational performance showed improvement, these one-time charges impacted the bottom line, leading to a net loss. In contrast, Q2 2017 saw a net income of $276 million, though it also included significant charges, such as a $460 million charge related to a Venezuelan promissory note.

The Production and Drilling segments showed strong revenue growth. The Production segment revenue increased by 30%, and Drilling revenue grew by 6%. The Cameron segment saw a 2% revenue increase, while the Reservoir Characterization segment experienced a 7% decline, mainly due to reduced WesternGeco multiclient seismic license sales and wind-down of marine seismic acquisition contracts.

As of June 30, 2018, SLB reported $3.0 billion in cash and short-term investments and had $3.6 billion available under committed debt facilities. The company believes these resources are sufficient to meet its business requirements for at least the next 12 months. Capital expenditures for the full year 2018 were expected to be approximately $2.0 billion.