Oilfield Services Firms' Q1 Results Point to Another Strong Year Ahead
April 23, 2014
Source: Varun Chandan, Arora
Department: The Motley Fool
Oilfield services firms Schlumberger (NYSE: SLB) , Baker Hughes (NYSE: BHI) , and Halliburton (NYSE: HAL) have released their financial results for the first quarter, posting better than expected profits. The results have highlighted strength in the Middle East and Asia. Both regions are expected to be key growth drivers for oilfield services firms going forward.
Excellent run in 2013
Oilfield services companies had an excellent run in 2013, with shares of Schlumberger, Halliburton, and Baker Hughes posting significant gains. As I noted in a previous article, the gains were mainly due to the fact that all three companies benefited from higher capital spending from oil majors. Although several big oil companies have announced plans to reduce capital spending over the next few years, the outlook for oilfield services companies has not dampened. This was confirmed by the recently reported first-quarter results.
Although the harsh weather in North America had a negative impact, all three major oilfield services firms posted better than expected earnings for the first quarter of 2014. Last week, Schlumberger reported first-quarter net income of $1.21 per share, beating Street estimates by a penny. Baker Hughes also beat Street estimates last week, posting first-quarter adjusted earnings of $0.84 per share. Analysts were expecting Baker Hughes to report adjusted earnings of $0.78 per share. On Monday, Halliburton reported earnings of $0.73 per share, beating forecasts of $0.71 per share.
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