Yahoo Finance How Did Schlumberger’s Stock React to Earnings?
After Schlumberger's Lower Earnings, What's on the Horizon?
Schlumberger’s share price reaction
Schlumberger released its results for fiscal 1Q16 on April 21. Its stock reacted somewhat negatively immediately after the earnings release. It fell ~2% to $79.30 from the previous day’s close. Since the beginning of this year, its share price is up 14.6%.
Core Laboratories (CLB) released its results on April 20. It saw a 1.6% increase in its share price on the day of the earnings release.
SLB’s share price returns versus the industry
In the past year, Schlumberger’s stock has returned -9.8% (net of dividends) as of April 21. In the past year, SLB has outperformed the Market Vectors Oil Services ETF (OIH), which has returned -19%. The Energy Select Sector SPDR ETF (XLE), the broader energy industry ETF, has produced a -6% return. SLB has hugely outperformed the US rig count, which returned -54% in the past year.
Schlumberger has, however, underperformed the SPDR S&P 500 ETF (SPY), which has returned 1.8% during the same period. SLB’s peer Halliburton (HAL) has also underperformed SLB, producing a -13% return as of April 21.
Does free cash flow help SLB make acquisitions?
On April 1, Schlumberger acquired its oilfield services industry peer Cameron International. Following the merger, Cameron became SLB’s fourth product group. SLB’s fiscal 1Q16 free cash flow (or FCF) was $661 million in fiscal 1Q16, excluding severance payments and costs incurred on SPM (Schlumberger Production Management) investments and multiclient seismic data. Capex for fiscal 1Q16 was $549 million—9% lower than a year ago.
SLB’s CEO, Paal Kibsgaard, commented, “Our unmatched ability to generate cash in the oilfield services industry allows us to capitalize on a variety of significant business opportunities while continuing to return cash to our shareholders through dividends and stock buy-backs. This, combined with the strategic moves we have made that include the Cameron merger, leaves us very well positioned once markets start to recover.” Read Market Realist’s article Against the Odds: How Schlumberger Keeps Delivering to learn about Schlumberger in depth.
Next, we’ll discuss Wall Street analysts’ targets for Schlumberger.
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