10-QPeriod: Q2 FY2019

SLB LIMITED/NV Quarterly Report for Q2 Ended Jun 30, 2019

Filed July 24, 2019For Securities:SLB

Summary

SLB LIMITED/NV (SLB) reported total revenue of $8.269 billion for the second quarter of 2019, which was essentially flat compared to the same period in the prior year ($8.303 billion). Net income attributable to Schlumberger increased to $492 million, or $0.35 per diluted share, from $430 million, or $0.31 per diluted share, in the second quarter of 2018. This improvement was driven by higher international revenue, which offset a decline in North America, as the company continued to navigate a challenging global energy market. Management noted a sequential increase in revenue and profitability, particularly in international markets, driven by strong activity in segments like Reservoir Characterization and Drilling. For the first six months of 2019, total revenue remained stable at $16.149 billion compared to $16.131 billion in the prior year. Net income attributable to Schlumberger for the six-month period was $913 million, or $0.65 per diluted share, down from $955 million, or $0.69 per diluted share, in the first half of 2018, impacted by a $184 million pretax charge recorded in the prior year's second quarter. The company is focusing on operational efficiencies and strategic international growth while anticipating continued investment moderation in North America. Despite these mixed results, SLB generated positive free cash flow and maintained a strong liquidity position.

Financial Highlights

48 data points
Beta

Revenue

$8.27B

Net Income

$492.00M

5.9% Net Margin

EPS (Diluted)

$0.35

Total Assets

$70.59B

Cash & Equivalents

$1.47B

Free Cash Flow

$704.00M

Financial Statements
Beta
Revenue$8.27B
R&D Expenses$179.00M
Operating Income$968.00M
Interest Expense$156.00M
Net Income$492.00M
EPS (Basic)$0.36
EPS (Diluted)$0.35
Shares Outstanding (Basic)1.38B
Shares Outstanding (Diluted)1.40B

Key Highlights

  • 1Total revenue for Q2 2019 was $8.269 billion, largely flat year-over-year.
  • 2Net income attributable to Schlumberger increased to $492 million in Q2 2019 from $430 million in Q2 2018, resulting in diluted EPS of $0.35 compared to $0.31.
  • 3International revenue increased by 8% year-over-year in Q2 2019, while North America revenue declined by 11%, reflecting a strategic shift in industry spending.
  • 4The company reported a pretax charge of $184 million in Q2 2018 related to headcount reductions, which benefited the year-over-year comparison for Q2 2019 net income.
  • 5For the first six months of 2019, revenue was $16.149 billion, flat year-over-year, and net income was $913 million ($0.65/share) down from $955 million ($0.69/share) in the comparable 2018 period.
  • 6Free cash flow for the first six months of 2019 was $176 million, down from $100 million in the first six months of 2018.
  • 7The company's balance sheet shows total assets of $70.591 billion and total liabilities of $34.318 billion as of June 30, 2019.

Frequently Asked Questions

In the second quarter of 2019, SLB reported total revenue of $8.269 billion, which was essentially flat year-over-year. Net income attributable to Schlumberger increased to $492 million from $430 million in the second quarter of 2018, translating to diluted earnings per share of $0.35 compared to $0.31 in the prior year period.

International revenue saw an 8% increase year-over-year in Q2 2019, driven by strong activity in Europe/CIS/Africa and Asia. Conversely, North America revenue decreased by 11% year-over-year, reflecting lower E&P spending in the region, particularly in the North America land segment.

SLB anticipates oil market sentiments to remain balanced, with oil demand forecasts slightly reduced due to trade war concerns. They see US shale oil as the primary near- to medium-term growth source but expect its growth rate to slow as E&P operators prioritize cash flow over growth. Production cuts by OPEC and Russia are expected to keep oil prices range-bound. The company forecasts international E&P investment to grow 7-8% in 2019, while North America land spending is expected to decline by 10%.

In the second quarter of 2018, SLB recorded a $184 million pretax charge related to headcount reductions. There were no such significant charges or credits recorded in the first six months of 2019. This prior year charge benefited the year-over-year net income comparison for Q2 2019.