Schlumberger Announces Second-Quarter 2017 Results
- Revenue of
$7.5 billion increased 8% sequentially - Pretax operating income of
$950 million increased 25% sequentially - GAAP loss per share, including charges of
$0.40 per share, was$0.05 - EPS, excluding charges, was
$0.35 - Quarterly cash dividend of
$0.50 per share was approved
(Stated in millions, except per share amounts) | |||||||||||||||||||||
Three Months Ended | Change | ||||||||||||||||||||
Jun. 30, 2017 | Mar. 31, 2017 | Jun. 30, 2016 | Sequential | Year-on-year | |||||||||||||||||
Revenue | $7,462 | $6,894 | $7,164 | 8 | % | 4 | % | ||||||||||||||
Pretax operating income | $950 | $757 | $747 | 25 | % | 27 | % | ||||||||||||||
Pretax operating margin | 12.7 | % | 11.0 | % | 10.4 | % | 175 bps | 231 bps | |||||||||||||
Net income (loss) (GAAP basis) | $(74 | ) | $279 | $(2,160 | ) | n/m | n/m | ||||||||||||||
Net income, excluding charges & credits* | $488 | $347 | $316 | 41 | % | 54 | % | ||||||||||||||
Diluted EPS (loss per share) (GAAP basis) | $(0.05 | ) | $0.20 | $(1.56 | ) | n/m | n/m | ||||||||||||||
Diluted EPS, excluding charges & credits* | $0.35 | $0.25 | $0.23 | 40 | % | 52 | % | ||||||||||||||
*These are non-GAAP financial measures. See section below entitled "Charges & Credits" for details. | |||||||||||||||||||||
n/m = not meaningful |
Schlumberger Chairman and CEO
"North America revenue increased 18% following our rapid deployment of idle hydraulic fracturing capacity as land activity further accelerated during the second quarter, partially offset by further weakness offshore in the US Gulf of
"In the international markets, revenue increased 4% sequentially, led by
"Among the business segments, growth in the second quarter was led by the Production and Drilling Groups, where revenue increased sequentially by 14% and 6%, respectively, as hydraulic fracturing and directional drilling activity in US land accelerated.
"While the activity outlook in
"In this market, we continue to focus on serving our customers and driving our business forward, building on our successful efforts over the past three years of broadening our technology portfolio and increasing our addressable market, further streamlining our execution machine, and pursuing more collaborative and commercially aligned ways of working with new and existing customers.
"As part of this focus, we announced a new agreement yesterday to acquire a majority equity interest in the
"We also remain on track to close the OneStimSM joint venture transaction in the second half of this year, which will allow us to further capitalize on the recovery in
"Based on these, we continue to be optimistic about the future of Schlumberger, as we maintain an attentive watch and flexible approach to the shape and pace of the emerging oil market recovery."
Other Events
During the quarter, Schlumberger repurchased 5.5 million shares of its common stock at an average price of
On
On
On
On
Consolidated Revenue by Geography
(Stated in millions) | |||||||||||||||||
Three Months Ended | Change | ||||||||||||||||
Jun. 30, 2017 | Mar. 31, 2017 | Jun. 30, 2016 | Sequential | Year-on-year | |||||||||||||
North America | $2,202 | $1,871 | $1,737 | 18 | % | 27 | % | ||||||||||
Latin America | 1,039 | 952 | 1,007 | 9 | % | 3 | % | ||||||||||
Europe/CIS/Africa | 1,750 | 1,652 | 1,948 | 6 | % | -10 | % | ||||||||||
Middle East & Asia | 2,347 | 2,319 | 2,404 | 1 | % | -2 | % | ||||||||||
Eliminations & other | 124 | 100 | 68 | n/m | n/m | ||||||||||||
$7,462 | $6,894 | $7,164 | 8 | % | 4 | % | |||||||||||
North America revenue | $2,202 | $1,871 | $1,737 | 18 | % | 27 | % | ||||||||||
International revenue | $5,136 | $4,922 | $5,359 | 4 | % | -4 | % | ||||||||||
n/m = not meaningful |
Second-quarter revenue of
In
International Areas
Revenue in the
(Stated in millions) | ||||||||||||||||||||
Three Months Ended | Change | |||||||||||||||||||
Jun. 30, 2017 | Mar. 31, 2017 | Jun. 30, 2016 | Sequential | Year-on-year | ||||||||||||||||
Revenue | $1,759 | $1,618 | $1,586 | 9 | % | 11 | % | |||||||||||||
Pretax operating income | $299 | $281 | $268 | 7 | % | 12 | % | |||||||||||||
Pretax operating margin | 17.0 | % | 17.3 | % | 16.9 | % | -34 bps | 13 bps |
Pretax operating margin of 17% was essentially flat sequentially as the increased contribution from high-margin Wireline exploration activities was offset by reduced profitability in Testing & Process due to increased project costs.
In
Offshore
In
Offshore
In
In
In
WesternGeco was awarded multiple offshore seismic survey contracts for the provision of Q-Marine* point-receiver marine seismic technology with the CLA* continuous line acquisition method.
BP awarded WesternGeco the data processing and imaging of a state-of-the-art, ultrahigh-density ocean-bottom survey to be acquired over the Clair Ridge Field, West of
Drilling Group
(Stated in millions) | ||||||||||||||||||||
Three Months Ended | Change | |||||||||||||||||||
Jun. 30, 2017 | Mar. 31, 2017 | Jun. 30, 2016 | Sequential | Year-on-year | ||||||||||||||||
Revenue | $2,107 | $1,985 | $2,034 | 6 | % | 4 | % | |||||||||||||
Pretax operating income | $302 | $229 | $171 | 32 | % | 77 | % | |||||||||||||
Pretax operating margin | 14.3 | % | 11.5 | % | 8.4 | % | 278 bps | 594 bps |
Drilling Group revenue of
Pretax operating margin of 14% increased 278 basis points (bps) sequentially due to increased volume and pricing improvements from the greater uptake of Drilling & Measurements and Bits & Drilling Tools technologies in US land, although this was partially offset by pricing pressure in the US Gulf of
Drilling Group performance in the second quarter was strengthened by a combination of IDS operations, which provide project management, engineering design, and technical optimization capabilities. Group performance was also boosted by new technology deployments and contract awards.
In
In
In
In the US Gulf of
In Oklahoma, Drilling & Measurements used PeriScope HD* multilayer bed boundary detection service for
In the
In
In
In
In
(Stated in millions) | ||||||||||||||||||||
Three Months Ended | Change | |||||||||||||||||||
Jun. 30, 2017 | Mar. 31, 2017 | Jun. 30, 2016 | Sequential | Year-on-year | ||||||||||||||||
Revenue | $2,496 | $2,187 | $2,121 | 14 | % | 18 | % | |||||||||||||
Pretax operating income | $221 | $110 | $82 | 101 | % | 170 | % | |||||||||||||
Pretax operating margin | 8.9 | % | 5.0 | % | 3.9 | % | 382 bps | 499 bps |
Pretax operating margin of 9% increased 382 bps sequentially due to increased activity and pricing recovery on land in
In
In
In
In
In
(Stated in millions) | ||||||||||||||||||||
Three Months Ended | Change | |||||||||||||||||||
Jun. 30, 2017 | Mar. 31, 2017 | Jun. 30, 2016 | Sequential | Year-on-year | ||||||||||||||||
Revenue | $1,265 | $1,229 | $1,525 | 3 | % | -17 | % | |||||||||||||
Pretax operating income | $174 | $162 | $250 | 8 | % | -30 | % | |||||||||||||
Pretax operating margin | 13.8 | % | 13.2 | % | 16.4 | % | 61 bps | -260 bps |
Pretax operating margin of 14% slightly improved sequentially, as increased project volumes and product sales in Surface Systems and Valves & Measurement and continued strong project execution in OneSubsea more than offset the impact of falling product backlog in Drilling Systems.
Cameron Drilling Systems and M-I SWACO collaborated on product development to deliver the industry's first original equipment manufacturer deepwater managed pressure drilling (MPD) system. The integrated solution is comprised of a riser joint, surface manifolds, a single control system and umbilical, and other equipment. To date, Schlumberger has received orders for four of the systems—the first was delivered in
TAQA awarded OneSubsea an engineering, procurement, construction, installation and commissioning (EPCIC) contract for the Otter field in the
In the US Gulf of
Financial Tables |
|||||||||||||
Condensed Consolidated Statement of Income (Loss) | |||||||||||||
(Stated in millions, except per share amounts) | |||||||||||||
Second Quarter | Six Months | ||||||||||||
Periods Ended June 30, | 2017 | 2016 | 2017 | 2016 | |||||||||
Revenue | $7,462 | $7,164 | $14,356 | $13,684 | |||||||||
Interest and other income | 62 | 54 | 108 | 98 | |||||||||
Expenses | |||||||||||||
Cost of revenue (1) | 6,468 | 6,465 | 12,544 | 11,925 | |||||||||
Research & engineering | 196 | 257 | 406 | 497 | |||||||||
General & administrative | 110 | 103 | 208 | 213 | |||||||||
Impairments & other (1) | 510 | 2,573 | 510 | 2,573 | |||||||||
Merger & integration (1) | 81 | 185 | 164 | 185 | |||||||||
Interest | 142 | 149 | 281 | 282 | |||||||||
Income (loss) before taxes | $17 | $(2,514 | ) | $351 | $(1,893 | ) | |||||||
Taxes on income (loss) (1) | 98 | (368 | ) | 148 | (270 | ) | |||||||
Net income (loss) | $(81 | ) | $(2,146 | ) | $203 | $(1,623 | ) | ||||||
Net income (loss) attributable to noncontrolling interests | (7 | ) | 14 | (2 | ) | 36 | |||||||
Net income (loss) attributable to Schlumberger (1) | $(74 | ) | $(2,160 | ) | $205 | $(1,659 | ) | ||||||
Diluted earnings (loss) per share of Schlumberger (1) | $(0.05 | ) | $(1.56 | ) | $0.15 | $(1.26 | ) | ||||||
Average shares outstanding | 1,387 | 1,389 | 1,390 | 1,321 | |||||||||
Average shares outstanding assuming dilution | 1,387 | 1,389 | 1,397 | 1,321 | |||||||||
Depreciation & amortization included in expenses (2) | $986 | $1,113 | $1,975 | $2,080 |
(1) See section entitled "Charges & Credits" for details.
(2) Includes depreciation of property, plant and equipment and amortization of intangible assets, multiclient seismic data costs and SPM investments.
Condensed Consolidated Balance Sheet | |||||
(Stated in millions) | |||||
Jun. 30, | Dec. 31, | ||||
Assets | 2017 | 2016 | |||
Current Assets | |||||
Cash and short-term investments | $6,218 | $9,257 | |||
Receivables | 8,925 | 9,387 | |||
Other current assets | 6,130 | 5,283 | |||
21,273 | 23,927 | ||||
Fixed income investments, held to maturity | 13 | 238 | |||
Fixed assets | 12,358 | 12,821 | |||
Multiclient seismic data | 1,042 | 1,073 | |||
Goodwill | 25,058 | 24,990 | |||
Intangible assets | 9,636 | 9,855 | |||
Other assets | 5,482 | 5,052 | |||
$74,862 | $77,956 | ||||
Liabilities and Equity | |||||
Current Liabilities | |||||
Accounts payable and accrued liabilities | $9,444 | $10,016 | |||
Estimated liability for taxes on income | 1,159 | 1,188 | |||
Short-term borrowings and current portion | |||||
of long-term debt | 2,224 | 3,153 | |||
Dividends payable | 700 | 702 | |||
13,527 | 15,059 | ||||
Long-term debt | 16,600 | 16,463 | |||
Deferred taxes | 2,000 | 1,880 | |||
Postretirement benefits | 1,385 | 1,495 | |||
Other liabilities | 1,398 | 1,530 | |||
34,910 | 36,427 | ||||
Equity | 39,952 | 41,529 | |||
$74,862 | $77,956 |
Liquidity |
|||||||||||||||
(Stated in millions) | |||||||||||||||
Components of Liquidity |
Jun. 30, |
Mar. 31, |
Dec. 31, |
Jun. 30, |
|||||||||||
Cash and short-term investments | $6,218 | $7,353 | $9,257 | $11,192 | |||||||||||
Fixed income investments, held to maturity | 13 | 238 | 238 | 386 | |||||||||||
Short-term borrowings and current portion of long-term debt | (2,224 | ) | (2,449 | ) | (3,153 | ) | (3,371 | ) | |||||||
Long-term debt | (16,600 | ) | (16,538 | ) | (16,463 | ) | (18,252 | ) | |||||||
Net Debt (1) | $(12,593 | ) | $(11,396 | ) | $(10,121 | ) | $(10,045 | ) | |||||||
Details of changes in liquidity follow: | |||||||||||||||
Six | Second | Six | |||||||||||||
Months | Quarter | Months | |||||||||||||
Periods Ended June 30, | 2017 | 2017 | 2016 | ||||||||||||
Net income (loss) before noncontrolling interests | $203 | $(81 | ) | $(1,623 | ) | ||||||||||
Impairment and other charges, net of tax before noncontrolling interests | 643 | 574 | 2,476 | ||||||||||||
$846 | $493 | $853 | |||||||||||||
Depreciation and amortization (2) | 1,975 | 986 | 2,080 | ||||||||||||
Pension and other postretirement benefits expense | 52 | 15 | 92 | ||||||||||||
Stock-based compensation expense | 180 | 92 | 145 | ||||||||||||
Pension and other postretirement benefits funding | (74 | ) | (45 | ) | (83 | ) | |||||||||
Change in working capital | (1,339 | ) | (548 | ) | (250 | ) | |||||||||
Other | (126 | ) | (135 | ) | 5 | ||||||||||
Cash flow from operations (3) | $1,514 | $858 | $2,842 | ||||||||||||
Capital expenditures | (884 | ) | (503 | ) | (998 | ) | |||||||||
SPM investments | (328 | ) | (184 | ) | (729 | ) | |||||||||
Multiclient seismic data capitalized | (190 | ) | (74 | ) | (333 | ) | |||||||||
Free cash flow (4) | 112 | 97 | 782 | ||||||||||||
Stock repurchase program | (770 | ) | (398 | ) | (506 | ) | |||||||||
Dividends paid | (1,393 | ) | (697 | ) | (1,255 | ) | |||||||||
Proceeds from employee stock plans | 143 | 8 | 195 | ||||||||||||
(1,908 | ) | (990 | ) | (784 | ) | ||||||||||
Business acquisitions and investments, net of cash acquired plus debt assumed | (364 | ) | (91 | ) | (3,790 | ) | |||||||||
Other | (200 | ) | (116 | ) | 76 | ||||||||||
Increase in Net Debt | (2,472 | ) | (1,197 | ) | (4,498 | ) | |||||||||
Net Debt, beginning of period | (10,121 | ) | (11,396 | ) | (5,547 | ) | |||||||||
Net Debt, end of period | $(12,593 | ) | $(12,593 | ) | $(10,045 | ) |
(1) | "Net Debt" represents gross debt less cash, short-term investments and fixed income investments, held to maturity. Management believes that Net Debt provides useful information regarding the level of Schlumberger's indebtedness by reflecting cash and investments that could be used to repay debt. Net Debt is a non-GAAP financial measure that should be considered in addition to, not as a substitute for or superior to, total debt. | |
(2) | Includes depreciation of property, plant and equipment and amortization of intangible assets, multiclient seismic data costs and SPM investments. | |
(3) | Includes severance payments of approximately $230 million and $90 million during the six months and second quarter ended June 30, 2017, respectively; and $545 million during the six months ended June 30, 2016. The six months ended June 30, 2016 also includes approximately $100 million of one-off transaction-related payments associated with the acquisition of Cameron. | |
(4) | "Free cash flow" represents cash flow from operations less capital expenditures, SPM investments and multiclient seismic data costs capitalized. Management believes that free cash flow is an important liquidity measure for the company and that it is useful to investors and management as a measure of our ability to generate cash. Once business needs and obligations are met, this cash can be used to reinvest in the company for future growth or to return to shareholders through dividend payments or share repurchases. Free cash flow does not represent the residual cash flow available for discretionary expenditures. Free cash flow is a non-GAAP financial measure that should be considered in addition to not as substitute for or superior to, cash flow from operations. |
Charges & Credits
In addition to financial results determined in accordance with US generally accepted accounting principles (GAAP), this Second-Quarter 2017 Earnings Release also includes non-GAAP financial measures (as defined under the SEC's Regulation G). Net income, excluding charges & credits, as well as measures derived from it (including diluted EPS, excluding charges & credits; net income before noncontrolling interests, excluding charges & credits; and effective tax rate, excluding charges & credits) are non-GAAP financial measures. Management believes that the exclusion of charges & credits from these financial measures enables it to evaluate more effectively Schlumberger's operations period over period and to identify operating trends that could otherwise be masked by the excluded items. These measures are also used by management as performance measures in determining certain incentive compensation. The foregoing non-GAAP financial measures should be considered in addition to, not as a substitute for or superior to, other measures of financial performance prepared in accordance with GAAP. The following is a reconciliation of these non-GAAP measures to the comparable GAAP measures.
(Stated in millions, except per share amounts) | ||||||||||||||
Second Quarter 2017 | ||||||||||||||
Pretax | Tax |
Noncont. |
Net |
Diluted |
||||||||||
Schlumberger net loss (GAAP basis) | $17 | $98 | $(7 | ) | $(74 | ) | $(0.05 | ) | ||||||
Promissory note fair value adjustment and other | 510 | - | 12 | 498 | 0.36 | |||||||||
Merger & integration | 81 | 17 | - | 64 | 0.05 | |||||||||
Schlumberger net income, excluding charges & credits | $608 | $115 | $5 | $488 | $0.35 | |||||||||
Six Months 2017 | ||||||||||||||
Pretax | Tax |
Noncont. |
Net |
Diluted |
||||||||||
Schlumberger net income (GAAP basis) | $351 | $148 | $(2 | ) | $205 | $0.15 | ||||||||
Promissory note fair value adjustment and other | 510 | - | 12 | 498 | 0.36 | |||||||||
Merger & integration | 164 | 31 | - | 133 | 0.10 | |||||||||
Schlumberger net income, excluding charges & credits | $1,025 | $179 | $10 | $836 | $0.60 | |||||||||
First Quarter 2017 | ||||||||||||||
Pretax | Tax |
Noncont. |
Net |
Diluted |
||||||||||
Schlumberger net income (GAAP basis) | $334 | $50 | $5 | $279 | $0.20 | |||||||||
Merger & integration | 82 | 14 | - | 68 | 0.05 | |||||||||
Schlumberger net income, excluding charges & credits | $416 | $64 | $5 | $347 | $0.25 | |||||||||
* Does not add due to rounding |
(Stated in millions, except per share amounts) | ||||||||||||||
Second Quarter 2016 | ||||||||||||||
Pretax | Tax |
Noncont. |
Net |
Diluted |
||||||||||
Schlumberger net loss (GAAP basis) | $(2,514 | ) | $(368 | ) | $14 | $(2,160 | ) | $(1.56 | ) | |||||
Impairment & other: | ||||||||||||||
Fixed asset impairments | 1,058 | 177 | - | 881 | 0.63 | |||||||||
Workforce reduction | 646 | 63 | - | 583 | 0.42 | |||||||||
Inventory write-downs | 616 | 49 | - | 567 | 0.41 | |||||||||
Multiclient seismic data impairment | 198 | 62 | - | 136 | 0.10 | |||||||||
Other restructuring charges | 55 | - | - | 55 | 0.04 | |||||||||
Merger & integration: |
||||||||||||||
Merger-related employee benefits and professional fees | 92 | 17 | - | 75 | 0.05 | |||||||||
Other merger and integration-related costs | 93 | 19 | - | 74 | 0.05 | |||||||||
Amortization of purchase accounting inventory fair value adjustment (1) | 150 | 45 | - | 105 | 0.08 | |||||||||
Schlumberger net income, excluding charges & credits | $394 | $64 | $14 | $316 | $0.23 | |||||||||
Six Months 2016 | ||||||||||||||
Pretax | Tax |
Noncont. |
Net |
Diluted |
||||||||||
Schlumberger net loss (GAAP basis) | $(1,893 | ) | $(270 | ) | $36 | $(1,659 | ) | $(1.26 | ) | |||||
Impairment & other: | ||||||||||||||
Fixed asset impairments | 1,058 | 177 | - | 881 | 0.66 | |||||||||
Workforce reduction | 646 | 63 | - | 583 | 0.44 | |||||||||
Inventory write-downs | 616 | 49 | - | 567 | 0.43 | |||||||||
Multiclient seismic data impairment | 198 | 62 | - | 136 | 0.10 | |||||||||
Other restructuring charges | 55 | - | - | 55 | 0.04 | |||||||||
Merger & integration: |
||||||||||||||
Merger-related employee benefits and professional fees | 92 | 17 | - | 75 | 0.06 | |||||||||
Other merger and integration-related costs | 93 | 19 | - | 74 | 0.06 | |||||||||
Amortization of purchase accounting inventory fair value adjustment (1) | 150 | 45 | - | 105 | 0.08 | |||||||||
Schlumberger net income, excluding charges & credits | $1,015 | $162 | $36 | $817 | $0.62 | |||||||||
(1) Recorded in Cost of revenue in the Condensed Consolidation Statement of Income (Loss). |
||||||||||||||
* Does not add due to rounding |
Product Groups |
||||||||||||||||||||||||
(Stated in millions) | ||||||||||||||||||||||||
Three Months Ended | ||||||||||||||||||||||||
Jun. 30, 2017 | Mar. 31, 2017 | Jun. 30, 2016 | ||||||||||||||||||||||
Revenue |
Income |
Revenue |
Income |
Revenue |
Income |
|||||||||||||||||||
Reservoir Characterization | $1,759 | $299 | $1,618 | $281 | $1,586 | $268 | ||||||||||||||||||
Drilling | 2,107 | 302 | 1,985 | 229 | 2,034 | 171 | ||||||||||||||||||
Production | 2,496 | 221 | 2,187 | 110 | 2,121 | 82 | ||||||||||||||||||
Cameron | 1,265 | 174 | 1,229 | 162 | 1,525 | 250 | ||||||||||||||||||
Eliminations & other | (165 | ) | (46 | ) | (125 | ) | (25 | ) | (102 | ) | (24 | ) | ||||||||||||
Pretax operating income | 950 | 757 | 747 | |||||||||||||||||||||
Corporate & other | (242 | ) | (239 | ) | (241 | ) | ||||||||||||||||||
Interest income(1) | 28 | 24 | 24 | |||||||||||||||||||||
Interest expense(1) | (128 | ) | (126 | ) | (136 | ) | ||||||||||||||||||
Charges & credits | (591 | ) | (82 | ) | (2,908 | ) | ||||||||||||||||||
$7,462 | $17 | $6,894 | $334 | $7,164 | $(2,514 | ) |
(Stated in millions) | |||||||||||||||
Six Months Ended | |||||||||||||||
Jun. 30, 2017 | Jun. 30, 2016 | ||||||||||||||
Revenue |
Income |
Revenue |
Income |
||||||||||||
Reservoir Characterization | $3,377 | $580 | $3,305 | $601 | |||||||||||
Drilling | 4,092 | 531 | 4,527 | 542 | |||||||||||
Production | 4,683 | 331 | 4,497 | 288 | |||||||||||
Cameron | 2,494 | 336 | 1,525 | 250 | |||||||||||
Eliminations & other | (290 | ) | (71 | ) | (170 | ) | (33 | ) | |||||||
Pretax operating income | 1,707 | 1,648 | |||||||||||||
Corporate & other | (480 | ) | (414 | ) | |||||||||||
Interest income(1) | 52 | 37 | |||||||||||||
Interest expense(1) | (254 | ) | (256 | ) | |||||||||||
Charges & credits | (674 | ) | (2,908 | ) | |||||||||||
$14,356 | $351 | $13,684 | $(1,893 | ) | |||||||||||
(1) Excludes interest included in the Product Groups results. |
|||||||||||||||
Certain prior period items have been reclassified to conform to the current period presentation. |
Supplemental Information |
||
1) |
What is the capex guidance for the full year 2017? |
|
Capex (excluding multiclient and SPM investments) is expected to be $2.2 billion for 2017. | ||
2) |
What was the cash flow from operations for the second quarter of 2017? |
|
Cash flow from operations for the second quarter of 2017 was $858 million and included approximately $90 million of severance payments. | ||
3) |
What was the cash flow from operations for the first half of 2017? |
|
Cash flow from operations for the first half of 2017 was $1.5 billion and included approximately $230 million of severance payments. | ||
4) |
What was included in "Interest and other income" for the second quarter of 2017? |
|
"Interest and other income" for the second quarter of 2017 was $62 million. This amount consisted of earnings of equity method investments of $28 million and interest income of $34 million. | ||
5) |
How did interest income and interest expense change during the second quarter of 2017? |
|
Interest income of $34 million was $5 million higher sequentially. Interest expense of $142 million was $3 million higher sequentially. | ||
6) |
What is the difference between pretax operating income and Schlumberger's consolidated income before taxes? |
|
The difference principally consists of corporate items (including charges and credits) and interest income and interest expense not allocated to the segments as well as stock-based compensation expense, amortization expense associated with certain intangible assets (including intangible asset amortization expense resulting from the acquisition of Cameron), certain centrally managed initiatives, and other nonoperating items. | ||
7) |
What was the effective tax rate (ETR) for the second quarter of 2017? |
|
The ETR for the second quarter of 2017, calculated in accordance with GAAP, was 590% as compared to 14.8% for the first quarter of 2017. The ETR for the second quarter of 2017, excluding charges and credits, was 18.9% as compared to 15.3% for the first quarter of 2017. |
||
8) |
How many shares of common stock were outstanding as of June 30, 2017 and how did this change from the end of the previous quarter? |
|
There were 1.385 billion shares of common stock outstanding as of June 30, 2017. The following table shows the change in the number of shares outstanding from March 31, 2017 to June 30, 2017. |
(Stated in millions) | |||
Shares outstanding at March 31, 2017 |
1,389 | ||
Shares sold to optionees, less shares exchanged | - | ||
Vesting of restricted stock | 1 | ||
Shares issued under employee stock purchase plan | - | ||
Stock repurchase program | (5) | ||
Shares outstanding at June 30, 2017 | 1,385 |
9) |
What was the weighted average number of shares outstanding during the second quarter of 2017 and first quarter of 2017 and how does this reconcile to the average number of shares outstanding, assuming dilution used in the calculation of diluted earnings per share, excluding charges and credits? |
|
The weighted average number of shares outstanding during the second quarter of 2017 was 1.387 billion and 1.393 billion during the first quarter of 2017. | ||
The following is a reconciliation of the weighted average shares outstanding to the average number of shares outstanding, assuming dilution, used in the calculation of diluted earnings per share, excluding charges and credits. |
(Stated in millions) | ||||||
Second Quarter |
First Quarter |
|||||
Weighted average shares outstanding | 1,387 | 1,393 | ||||
Assumed exercise of stock options | 1 | 4 | ||||
Unvested restricted stock | 5 | 5 | ||||
Average shares outstanding, assuming dilution | 1,393 | 1,402 |
10) |
What was the unamortized balance of Schlumberger's investment in SPM projects at June 30, 2017 and how did it change as compared to December 31, 2016? |
|
The unamortized balance of Schlumberger's investments in SPM projects was approximately $2.6 billion and $2.5 billion at June 30, 2017 and December 31, 2016, respectively. These amounts are included within Other Assets in Schlumberger's Condensed Consolidated Balance Sheet. The change in the unamortized balance of Schlumberger's investment in SPM projects was as follows: |
(Stated in millions) | |||||
Balance at December 31, 2016 | $2,458 | ||||
SPM investments | 328 | ||||
Amortization of SPM investment | (213 | ) | |||
Balance at June 30, 2017 | $2,573 |
11) |
What was the amount of WesternGeco multiclient sales in the second quarter of 2017? |
|
Multiclient sales, including transfer fees, were $182 million in the second quarter of 2017 and $138 million in the first quarter of 2017. | ||
12) |
What was the WesternGeco backlog at the end of the second quarter of 2017? |
|
WesternGeco backlog, which is based on signed contracts with customers, was $566 million at the end of the second quarter of 2017. It was $613 million at the end of the first quarter of 2017. |
13) |
What were the orders and backlogs for Cameron Group's OneSubsea and Drilling Systems businesses? |
|
OneSubsea and Drilling Systems orders and backlogs were as follows: |
(Stated in millions) | |||||
Orders |
Second Quarter 2017 |
First Quarter 2017 |
|||
OneSubsea | $181 | $546 | |||
Drilling Systems | $170 |
|
$174 | ||
Backlog (at the end of period) | |||||
OneSubsea | $2,371 | $2,634 | |||
Drilling Systems | $566 |
|
$608 |
14) |
What is included in Impairments & other on Schlumberger's Condensed Consolidated Statement of Income (Loss) for the second quarter of 2017? |
|
During the second quarter of 2017, Schlumberger recorded $510 million of pretax charges that are classified in Impairments & other. The vast majority of this amount relates to a financing agreement that Schlumberger entered into with its primary customer in Venezuela. This agreement resulted in the exchange of $700 million of outstanding accounts receivable for an interest bearing promissory note. Schlumberger recorded this note at its estimated fair value on the date of exchange, which resulted in a charge. |
About Schlumberger
Schlumberger is the world's leading provider of technology for reservoir characterization, drilling, production, and processing to the oil and gas industry. Working in more than 85 countries and employing approximately 100,000 people who represent over 140 nationalities, Schlumberger supplies the industry's most comprehensive range of products and services, from exploration through production, and integrated pore-to-pipeline solutions that optimize hydrocarbon recovery to deliver reservoir performance.
*Mark of Schlumberger or of Schlumberger companies.
†Japan Oil, Gas and
Notes
Schlumberger will hold a conference call to discuss the earnings press release and business outlook on
The conference call will be webcast simultaneously at www.slb.com/irwebcast on a listen-only basis. A replay of the webcast will also be available at the same web site until
This second-quarter 2017 earnings release, as well as other statements we make, contain "forward-looking statements" within the meaning of the federal securities laws, which include any statements that are not historical facts, such as our forecasts or expectations regarding business outlook; growth for Schlumberger as a whole and for each of its segments (and for specified products or geographic areas within each segment); oil and natural gas demand and production growth; oil and natural gas prices; improvements in operating procedures and technology, including our transformation program; capital expenditures by Schlumberger and the oil and gas industry; the business strategies of Schlumberger's customers; the anticipated benefits of the Cameron transaction; the success of Schlumberger's joint ventures and alliances; future global economic conditions; and future results of operations. These statements are subject to risks and uncertainties, including, but not limited to, global economic conditions; changes in exploration and production spending by Schlumberger's customers and changes in the level of oil and natural gas exploration and development; general economic, political and business conditions in key regions of the world; foreign currency risk; pricing pressure; weather and seasonal factors; operational modifications, delays or cancellations; production declines; changes in government regulations and regulatory requirements, including those related to offshore oil and gas exploration, radioactive sources, explosives, chemicals, hydraulic fracturing services and climate-related initiatives; the inability of technology to meet new challenges in exploration; the inability to integrate the Cameron business and to realize expected synergies; the inability to retain key employees; and other risks and uncertainties detailed in this second-quarter 2017 earnings release and our most recent Forms 10-K, 10-Q, and 8-K filed with or furnished to the
View source version on businesswire.com: http://www.businesswire.com/news/home/20170721005260/en/
Source:
Schlumberger Limited
Simon Farrant - Schlumberger Limited, Vice President of Investor Relations
Joy V. Domingo - Schlumberger Limited, Manager of Investor Relations
Office +1 (713) 375-3535
investor-relations@slb.com