Published On: Mon, Apr 24th, 2017

Schlumberger Limited (NYSE:SLB) Release A Ramp Up In Drilling Activity in North America Boosted Pricing for Its Oilfield Services

Schlumberger Limited (NYSE:SLB) Dropping -2.18% to trade at $74.84. On the relative analysis with scale of 1-5, firm standing at analysts’ recommendation of 1.90. Volatility makes major charm for active investors, so firm has 1.59% volatility for month and its performance in stock market been -4.52%.

Schlumberger NV declared on Friday that a ramp up in drilling activity in North America boosted pricing for its oilfield services, but the cost of reactivating equipment idled during the slump in crude oil prices gutted margins. Oil stabilizing above $50 per barrel has encouraged oil producers to resume drilling after a more than two-year lull boosting demand for equipment and services provided by Schlumberger and its rivals.

The U.S. rig count rose more than 25 percent in the first three months of the year, according to data from Baker Hughes Inc. “In the first quarter, the North America land market continued to strengthen in terms of both activity and pricing, leading us to begin accelerating deployment of idle capacity for multiple product lines,” Schlumberger’s Chief Executive Officer PaalKibsgaard said. The world’s No.1 oilfield services provider said revenue rose 5.7 percent to $6.89 billion in the quarter ended March 31, but its cost of revenue increased 11.3 percent to $6.08 billion.

The company’s pre-tax operating margin fell to 11 percent in the latest quarter, from 13.8 percent a year earlier. Revenue from North America increased to $1.87 billion in the first quarter, up 6 percent from the preceding quarter and 27.8 percent from a year earlier. However, international revenue fell 7 percent to $4.92 billion from the preceding quarter, hurt by “greater-than-expected seasonal decline in activity and sales, particularly in China, Russia land and the North Sea.”

Technical Overview

For active investment technical position of Schlumberger Limited (NYSE:SLB) is vital, so start from price to book ratio firm has 2.54 and the it has forward price to earnings ratio of 22.90; these rations uncover that high-growth companies selling at low-growth prices, but it requires appropriate measurement approaches. The firm is presenting price to cash flow of 11.27 and free cash flow concluded as 66.90.

In current time period from sell-side analysts, price to current year EPS stands at -176.50%, and moving forward with price to next year’s EPS estimate is 94.52%. Giving further attention on price to sales ratio, that was 3.74, which attracting passive investors.

It attains gross profit margin of 13.50% and operating margin stands at -5.20% for trailing twelve months that is screening consistency of trends in firm’s earnings. To figure out more clear vision for passive investment, the firm has returns on investment of -2.30%; which denotes its efficiency of different investments in different sections. To dig out more, the returns on assets of firm also have on noticeable condition that is -2.20%.

Trading Strategies

Shares of Schlumberger Limited (NYSE:SLB) has noticeable volatility records; for a week price volatility of stock was 1.88% and 1.59% for a month. The co attains 1.39 for Average True Range for 14 days; it used by market technicians to enter and exit trades, and it is a useful tool to add to a trading system. Moving toward measuring performance of shares, the performance for quarter recorded as -12.94% and for year was -4.42%, and finally YTD performance was -10.31%. Moving average strategies uses as tailored to any time frame, suiting both long term investors and short-term traders, the firm is moving down from its 20 days moving average with -4.11% while 50 days moving average was -5.66%.