By Dan Molinksi
Schlumberger Ltd., the world's largest oil-field service
provider, is scheduled to announce its fourth-quarter and full-year
2014 earnings Thursday after the market closes. Here's what you
need to know:
EARNINGS FORECAST: Net income of $1.46 a share for the fourth
quarter is the consensus estimate of analysts surveyed by Thomson
Reuters, up from $1.35 cents a share in the same period last year.
Schlumberger hasn't provided earnings guidance for the quarter, but
the company warned in December it expected to post a pretax
write-down of $800 million for shrinking its fleet of seismic ships
and an additional $200 million pretax charge related to job
cuts.
REVENUE FORECAST: Revenue of $12.7 billion is forecast for the
fourth quarter, up from $11.9 billion a year ago.
WHAT TO WATCH:
--CUTS: Oil-field service companies are under tremendous
pressure to cut costs, pare back their workforce and slash the
prices they charge oil-company customers. Analysts will be
listening for any hint about layoffs and discounts on drilling and
fracking services.
--CONSOLIDATION: Rivals Halliburton Co. and Baker Hughes Inc.
are merging to better compete with Schlumberger. That could mean
Schlumberger will look at buying smaller companies to bolster its
services offered in the oil patch. Investors will want to know
whether there's any potential for M&A activity.
--SHALE: Schlumberger's clients are the most prolific
oil-pumping companies, so it's in a good position to forecast what
sustained $40 oil could mean to U.S. energy producers. The company
often offers a window into what its customers are planning -- how
many wells could be drilled and fracked, how much oil output to
expect and ways companies are making operations leaner.
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