| To: Bald Eagle who wrote (176) | 9/21/2003 11:40:42 PM | | From: elmatador | | | | Atos to buy Schlumberger units
By Alain Ruello, Astrid Wendlandt and Isabelle Chaperon
Published: September 21 2003 21:22 | Last Updated: September 21 2003 21:22
Atos Origin, the Franco-Dutch provider of information technology services, is expected to announce on Monday the acquisition of several IT businesses from Schlumberger, the Franco-US oil services group, for about €1.3bn ($1.5bn).
If approved by shareholders and competition authorities, the deal will partially unravel Schlumberger's acquisition of Sema, the IT consultancy business it bought in 2001 for $5.2bn and enable the group to focus on its core energy operations.
Analysts have long questioned Schlumberger's acquisition of Sema and raised doubts over the price for venturing into IT. Schlumberger took a $2.9bn charge on the Sema acquisition last year.
Atos and SchlumbergerSema are competing for a number of high-profile IT procurement contracts for the National Health Service in the UK.
About two-thirds of Atos's acquisition of Sema is expected to be paid in newly issued shares with the balance settled in cash, people close to both companies said. The transaction is said to be backed by Philips, the Dutch electronics group and Atos's largest shareholder with a 44.7 per cent stake.
The deal would see Atos take on most of Sema's operations in the UK and Europe. However, it would exclude Sema's IT activities in the oil and gas sector and several side businesses such as its telecom software division.
Under the terms of the agreement, Atos is said to have signed a long-term IT services contract with Schlumberger. If the transaction is completed, Atos will become a sizeable IT services provider of IT services and consulting in Europe. Atos moved into consulting in June 2002 with the acquisition of two KPMG consulting divisions in the UK and the Netherlands for €657m.
Schlumberger held informal talks earlier this year to sell some of its IT operations to Computer Sciences Corporation of the US. The talks ended in the summer without agreement. CSC was said to be principally interested in Sema's UK business while Schlumberger was keen to sell to SCS many of its other European businesses as well.
*Schlumberger will also announce on Monday the rebranding of its smartcards division as Axalto in a further sign it is preparing the business for an initial public offering, Martin Arnold reports in Paris.
The Paris-based business is valued by analysts at €800m. It has become the world's leading producer of microprocessor smartcards after overtaking France's Gemplus in terms of market share in the second half of last year. |
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| To: Bald Eagle who wrote (177) | 12/1/2003 4:36:13 AM | | From: elmatador | | | | Schlumberger seeks sale of IT unit
By Astrid Wendlandt
Published: November 30 2003 16:24 | Last Updated: November 30 2003 16:24
Schlumberger, the world's largest provider of oil field services, has retained Deutsche Bank to find a buyer for one of its remaining information technology divisions.
The disposal of Schlumberger's disaster recovery business, said to be worth more than $200m, is part of the Franco-US company's efforts to draw a line under its acquisition of Sema, the IT services business for which it overpaid.
The bulk of Sema's operations, which include an eight-year contract with the Olympic Games, were sold to Atos Origin of France for €1.287bn ($1.544bn) in September, a sharp discount to the $5.2bn it had paid for the business two years ago.
Schlumberger, which acquired Sema at a time when corporations started to cut spending on IT, announced in December 2002 that it wished to focus on oil services and took a $2.99bn impairment charge on Sema's carrying value.
The disaster recovery business, inherited from Sema, provides global financial institutions and investment banks such as JP Morgan and Royal Bank of Scotland with back-up offices and IT systems in case of emergency, and stores data for them off-site.
It has offices in several European and Asian capitals as well as in Istanbul, where the Turkish headquarters of HSBC were destroyed by terrorist bombs last month.
Schlumberger has refused to provide financial details about the business but people close to the company say it is profitable and makes sales of about $140m a year.
The price paid for businesses in the disaster recovery sector has historically been between 1.5 times and 2.5 times annual sales.
SunGard is one of several companies considering a bid. The Pennsylvania-based provider of disaster recovery services, which has made a string of acquisitions in Europe over the past five years, believes Schlumberger's division would fit well geographically with its other operations.
SunGard snapped up loss-making UK-based Guardian IT last year for £167m in cash and outflanked Hewlett-Packard in acquiring Comdisco, a rival with a strong foothold in Europe, for $825m in 2001.
Hewlett-Packard, best known for making printers and computers, is looking at Schlumberger's disaster recovery division. It is keen to expand its services in order to boost margins. Bridgepoint Capital, the private equity firm, is also thinking of making an indicative bid for Schlumberger's business.
Other suitors could emerge over the next few weeks as the sale process is still at an early stage.
However, Andrew Gould, chairman and chief executive of Schlumberger, is said to be interested in concluding a deal quickly.
The disaster recovery division is one of several Sema businesses Atos did not wish to buy when it agreed to take on most of its IT services activities three months ago.
Schlumberger, SunGard and Bridgepoint declined to comment. |
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| To: Bald Eagle who wrote (180) | 6/15/2004 10:48:18 AM | | From: elmatador | | | | Schlumberger Sees Double-Digit Growth
Reuters
Tuesday, June 15, 2004; 10:29 AM
washingtonpost.com
NEW YORK (Reuters) - Schlumberger Ltd. , the world's largest energy services company, expects earnings to grow at double-digit rates through the end of this decade, fueled by soaring oil and gas demand and increased drilling in emerging energy hubs such as Russia, the company said Tuesday.
Schlumberger, which noted this earnings growth may ebb and flow with industry cycles, said revenue at its Schlumberger Information Systems division should double by 2010.
The company, hosting an investor conference in Connecticut, said it also seeks an after-tax return on sales of 15 percent, including results from its WesternGeco seismic exploration joint venture with Baker Hughes Inc. .
The company, which has spent the past year and a half divesting assets outside of its core energy businesses, also intends to achieve return on capital employed in the upper teens on a percentage basis.
Schlumberger, however, said it does not expect to raise its quarterly dividend until earnings rise to a "higher plateau." Any excess cash after internal investments and acquisitions would be applied to stock buybacks, the company said. |
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| To: hdl who wrote (183) | 8/17/2005 1:32:02 AM | | From: American Spirit | | | | | Bushies will keep gouging and stealing from us until they fear congress is going to change hands thereby handing subpoena powers to the democrats. So enjoy the windfall profits while you can, oil companies. After that there will be investigations in the biggest ever ripoff in US history. |
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| From: Dennis Roth | 10/21/2005 6:07:43 PM | | | | | | Schlumberger (OP/A): Ex-hurricane, 3Q EPS ahead of expectations - Goldman Sachs - October 21, 2005
SLB recurring 3Q2005 EPS of $0.86 was in line with our estimate and consensus, but included $0.06 of hurricane impact vs our assumption of zero. On an apples basis, therefore, results were stronger with oilfield revenue ex-hurricane +4% vs our estimate and pretax income +5%. Results were stronger across all regions with Europe/ Africa/ CIS the star performer w/ revenue +8% + pretax income +16% vs expectations (PetroAlliance impact?). Oilfield incremental margins ex-hurricane of 33% /46% seq/ y-y were strong, but still have upside, in our view, particularly in N. America. Seismic revenue ex-hurricane was +17% vs our estimate and pretax profit was +45 with positive implications for BHI. Other income was also stronger = positive read across for SII. We maintain our OP/A rating with upward EPS revisions pending - $108 fair value.
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: Jason Gilbert, Terry Darling.
===
Previous Goldman Sachs remarks on Schlumberger:
SCHLUMBERGER (OP/A): Raising estimates + fair value to $107
Goldman Sachs July 24, 2005
Message 21537995
SCHLUMBERGER (OP/A): The quarter we've all been waiting for
Goldman Sachs July 22, 2005
Message 21532984
SCHLUMBERGER (OP/A): No one cares about earnings - why? April 26, 2005 - Goldman Sachs
Message 21269177 |
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| To: Dennis Roth who wrote (185) | 10/24/2005 9:35:53 AM | | From: Dennis Roth | | | | Schlumberger (OP/A): 35% upside to $108 fair value - Goldman Sachs - October 23, 2005
We are raising our 2006-07 EPS estimates for SLB to $4.40/ $5.00 from $4.30/ $4.90 as we've raised 2006 E&P spending growth to 20% from 15% (still 8% in 2007), which boosts revenue growth for SLB. Our offshore driller estimates already reflect this change + we will be making similar changes for other service stocks. We rate SLB OP/A w/ 35% upside to our $108 fair value estimate + see SLB among the most attractive service stocks for the following reasons:
(1) premier franchise outside N. America, where pricing improvement still appears under-appreciated by consensus,
(1a) upside to incremental margins as revenue growth will be more price than volume in 2006+,
(2) highest exposure to exploration activity among peers,
(3) among best positioned to counter wage inflation given global labor access/ development + raw material inflation given higher service vs mfg orientation.
3Q2005 EPS AHEAD OF EXPECTATIONS EX-HURRICANE IMPACT
SLB recurring 3Q2005 EPS ex-hurricane impact of $0.92 was ahead of our estimate + consensus of $0.86, which included minimal or no adjustment for hurricane impact. Seismic was the star performer with revenue/ pretax income 17%/ 45% ahead of our estimates. This has positive implications for BHI, which owns 30% of SLB's seismic company. SLB oilfield revenue/ pretax income were 4%/ 5% above our estimate, w/ stronger results in all regions, most notably N. America + Europe/ Africa/ CIS. Incremental margins ex-hurricane of 47% y-y and 35% sequentially were strong, though we believe even stronger incrementals are likely in coming quarters as pricing continues to rise. Cash flow and balance sheet items were in line.
IMPLICATIONS FOR THE INDUSTRY HURRICANE HEADLINE RISK.
Despite a larger than expected impact from hurricane ($0.06 vs $0.01-0.02), SLB reported EPS of $0.86 was in line. We believe investors inclined to add to positions on recent weakness have been waiting for indications that hurricane impact would not drive bad 3Q earnings headlines for service/ equipment stocks before wading back into the sector, which is down 10-15% since late September. SLB result confirm that headline risk is probably not going to be a major broad-based issue.
SEISMIC.
Stronger than expected 3Q performance in seismic is also positive for BHI + also VTS, PGS, TGS and CGG, though we believe it is clear that SLB's Q-seismic technology is differentiating performance relative to the competition. SLB also indicated that the normal seasonal jump in US Gulf data library sales may be somewhat muted this year given oil company focus on spending to repair damaged production facilities.
RAW MATERIAL COST INFLATION.
SLB indicated that it has been able to build price escalators into new contracts for raw material cost inflation since May. We suspect other companies are doing the same, and at the margin, this reduces risk that margin expansion in the service/ equipment sector will disappoint for these pressures. Still, we believe this remains a critical issue to watch and point out that investors can avoid this risk by focusing more on the offshore drillers. Labor inflation is a common theme across the entire industry (+10-15% in 2006), but already assumed in estimates, in our view. Among service/ equipment companies, we believe SLB's greater mix of service revenue gives it a lower risk profile.
SLB'S OTHER INCOME WAS ABOVE EXPECTATIONS - POSITIVE FOR SII.
SLB reported $35 mln of other income vs our estimate of $30 mln. This item is primarily (but not solely) SLB's 40% equity interest in its fluids joint venture with Smith Int'l. All else equal, this suggests SII may have stronger than expected 3Q EPS.
REGIONAL MARKET OUTLOOK.
At the margin, SLB commentary suggests potential upside to our assumptions for the 2006 market outlook for L. America (Venezuela) and Russia.
WHAT TO WATCH FOR 4Q EPS OUTLOOK.
In 4Q, SLB expects to recover $0.03-0.04 from activity in the US Gulf returning to normal following hurricane impact. We also estimate that underlying improvement in N. American drilling will add $0.02-0.03, with the same in Middle East/ Asia and L. America geomarkets adding $0.01-0.03. However, seasonal weakness in the N. Sea and Russia should cost $0.02-0.03.
SEISMIC J.V.
On December 1st, SLB/BHI's seismic joint venture agreement allows either party to propose a sale of its interest to the other for the first time. The receiving party has the option to sell its interest back to the instigating party at the same price. While neither party is obligated to do anything - and can propose anything outside the existing agreement as well - BHI has indicated it does not view its 30% interest as core long-term. However, we estimate a sale at this point in the cycle would be dilutive to 2006 EPS for BHI without a large simultaneous share repurchase. SLB indicates the business is core, but we do not think BHI is interested in earnings dilution at this point in the cycle. Bottom line, there is potential nothing happens, but the issue bears watching.
E&P BUDGET ANNOUNCEMENT SEASON IS AROUND THE CORNER.
Many E&P companies will announce 2006 capex plans over the balance of 2005, with December a particularly active month historically. All signals point to growth of 20-25% in 2006, but E&Ps are also sensitive to investor perception of capital discipline and often under-state plans at this time of year. Though most investors heave learned to take these announcements with a grain of salt, low-balling of budgets nonetheless can create concerns that oil service estimates are too high.
ARRIVAL OF WINTER WEATHER OFTEN STIMULATES A TRADING RALLY.
Oil service stocks have often rallied in October as investors anticipate the start of winter and improved commodity price psychology. Given that the group has sold off 10-15% over the last 3-4 weeks on fears of oil demand destruction, the onset of cold weather (or the anticipation of it) in the US could again be a catalyst.
NOVEMBER IS HISTORICALLY A BAD MONTH FOR OIL SERVICE STOCKS
November has historically been a bad month for oil service stocks as
(1) the stocks often rally in October in anticipation of winter,
(2) US + N. Sea rig counts often begin to weaken seasonally, causing investors to become nervous about 4Q-1Q estimates, and
(3) investors anticipate headline risk from E&P budget low-balling.
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: Jason Gilbert, Terry Darling. |
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