Shares of SLB, formerly known as Schlumberger Ltd., dropped Friday after the oil and gas services company reported third-quarter profit that topped expectations but revenue that came up shy.
The stock
SLB,
slumped 2% in premarket trading. Prior to the release of results, the stock was hovering just below the five-year closing high of $62.10, reached on Sept. 12. The stock’s decline comes even as crude oil futures
CL.1,
rally 1.4%.
Net income rose to $1.12 billion, or 78 cents a share, from $907 million, or 63 cents a share, in the same period a year ago. Excluding nonrecurring items, adjusted earnings per share of 78 was a penny above the FactSet consensus of 77 cents.
Revenue grew 11.1% to $8.31 billion, just below the FactSet consensus of $8.32 billion. International revenue increased 12.5% to $6.61 billion and North America revenue was up 6.5% to $1.64 billion.
Among the company’s largest business segments, well construction revenue rose 11% to $3.43 billion to match the FactSet consensus and production systems revenue increased 10% to $2.37 billion to top expectations of $2.36 billion, while reservoir performance revenue climbed 15% to $1.68 billion but missed expectations of $1.71 billion.
“The oil and gas industry continues to benefit from a multiyear growth cycle that has shifted to the international and offshore markets where we are the clear leader,” said Chief Executive Olivier Le Peuch. “Concurrently, upstream spending is accelerating as operators continue to invest in long-cycle developments, production capacity expansions, exploration and appraisal, and enhanced gas production.”
Upstream refers to oil and gas production, while downstream refers to bringing post-production product to customers.
SLB’s stock has gained 4.7% over the past three months through Thursday, while the Energy Select Sector SPDR ETF
XLE,
has rallied 9.9% and the S&P 500
SPX,
has lost 5.7%.
