SLB Schlumberger Ltd

   By Dave Sebastian 
 

Schlumberger Ltd. (SLB) is scheduled to report results for its fiscal third quarter premarket on Friday. Here is what you need to know:

EARNINGS FORECAST: Analysts on average expect profit of 40 cents a share, according to FactSet. Analysts expect Schlumberger to report adjusted earnings of 41 cents a share. The company will hold its investor call at 8:30 a.m. ET.

REVENUE FORECAST: Analysts expect sales of $8.5 billion, which is about flat compared with the same period last year, according to FactSet.

WHAT TO WATCH:

NEW CEO: The oilfield-service company named Olivier Le Peuch its new chief executive in July. Mr. Le Peuch has said shale companies are increasingly focused on avoiding parent-child well problems, which is when wells are drilled too closely, and one siphons production off the other. This is leading to increased demand for Schlumberger's products that help mitigate the issue, seen as a primary reason shale wells aren't producing as much as forecast. Cowen analysts said in a note Monday that they are looking for more specificity beyond a "foreseeable future" and a double-digit free cash flow margin, both of which are part of the Mr. Le Peuch's strategy.

NORTH AMERICA BUSINESS: Schlumberger's North American business has been hurt in recent quarters by a cutback in spending by U.S. shale drillers. The company has estimated that U.S. producers have cut spending in 2019 by about 10%, but that has been offset by efficiency gains enabling drillers to get more oil with less spending. It has also said it expects international exploration and production investment to grow 7% to 8% in 2019.

Write to Dave Sebastian at dave.sebastian@wsj.com

(END) Dow Jones Newswires

October 17, 2019 15:40 ET (19:40 GMT)

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