SLB (OP/A): First Take - Strong 1Q results; Reiterate OP/A - Goldman Sachs - April 21, 2006
Schlumberger (SLB, OP/A) posted better than expected 1Q driven by strong North America (NAM) performance. EPS of $0.59 was $0.04 above our est and consensus. NAM Rev/EBIT were 13%/24% above our est, being the key driver for the outperformance with strength in Wireline, Drilling&Measurements and Pressure Pumping. As expected, extreme cold weather in Russia hurt results in the Europe/CIS/Africa, but it was not enough to offset NAM strength. WesternGeco results were also strong with revenues in line and EBIT 38% above our est at $158 mn. SLB management reinforced its optimism towards the seismic market with 3 announcements: (1) SLB agreed to buy BHI's 30% stake in WesternGeco for $2.4 bn; (2) SLB will commission a 7th Q marine vessel (2Q07); and (3) SLB raised WesternGeco Capex to $350 mn, from $315 (ex-multi client surveys). SLB's bullish comments on seismic should be a positive for sentiment on VTS (IL/A).
Each of the analysts named below hereby certifies that, with respect to each subject company and its securities for which the analyst is responsible in this report, (1) all of the views expressed in this report accurately reflect his or her personal views about the subject companies and securities, and (2) no part of his or her compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed in this report: Daniel Henriques, CFA, and Daniel Boyd, CFA. |
