REG-Schlumberger Limited Schlumberger Announces Second-Quarter 2017 Results <Origin Href="QuoteRef">SLB.N</Origin> - Part 2
21/07/2017 12:05
- Part 2: For the preceding part double click ID:nBw5J1SJWa
$1,025 $179 $10 $836 $0.60
First Quarter 2017
Pretax Tax Noncont. Interests Net Diluted EPS
Schlumberger net income (GAAP basis) $334 $50 $5 $279 $0.20
Merger & integration 82 14 - 68 0.05
Schlumberger net income, excluding charges & credits $416 $64 $5 $347 $0.25
* Does not add due to rounding
(Stated in millions, except per share amounts)
Second Quarter 2016
Pretax Tax Noncont. Interests Net Diluted EPS *
Schlumberger net loss (GAAP basis) $(2,514 ) $(368 ) $14 $(2,160 ) $(1.56 )
Impairment & other:
Fixed asset impairments 1,058 177 - 881 0.63
Workforce reduction 646 63 - 583 0.42
Inventory write-downs 616 49 - 567 0.41
Multiclient seismic data impairment 198 62 - 136 0.10
Other restructuring charges 55 - - 55 0.04
Merger & integration:
Merger-related employee benefits and professional fees 92 17 - 75 0.05
Other merger and integration-related costs 93 19 - 74 0.05
Amortization of purchase accounting inventory fair value adjustment( 150 45 - 105 0.08
(1))
Schlumberger net income, excluding charges & credits $394 $64 $14 $316 $0.23
Six Months 2016
Pretax Tax Noncont. Interests Net Diluted EPS *
Schlumberger net loss (GAAP basis) $(1,893 ) $(270 ) $36 $(1,659 ) $(1.26 )
Impairment & other:
Fixed asset impairments 1,058 177 - 881 0.66
Workforce reduction 646 63 - 583 0.44
Inventory write-downs 616 49 - 567 0.43
Multiclient seismic data impairment 198 62 - 136 0.10
Other restructuring charges 55 - - 55 0.04
Merger & integration:
Merger-related employee benefits and professional fees 92 17 - 75 0.06
Other merger and integration-related costs 93 19 - 74 0.06
Amortization of purchase accounting inventory fair value adjustment( 150 45 - 105 0.08
(1))
Schlumberger net income, excluding charges & credits $1,015 $162 $36 $817 $0.62
((1)) Recorded in Cost of revenue in the Condensed Consolidation Statement of
Income (Loss).
* Does not add due to rounding
Product Groups
(Stated in millions)
Three Months Ended
Jun. 30, 2017 Mar. 31, 2017 Jun. 30, 2016
Revenue Income Before Taxes Revenue Income Before Taxes Revenue Income Before Taxes
Reservoir Characterization $1,759 $299 $1,618 $281 $1,586 $268
Drilling 2,107 302 1,985 229 2,034 171
Production 2,496 221 2,187 110 2,121 82
Cameron 1,265 174 1,229 162 1,525 250
Eliminations & other (165 ) (46 ) (125 ) (25 ) (102 ) (24 )
Pretax operating income 950 757 747
Corporate & other (242 ) (239 ) (241 )
Interest income((1)) 28 24 24
Interest expense((1)) (128 ) (126 ) (136 )
Charges & credits (591 ) (82 ) (2,908 )
$7,462 $17 $6,894 $334 $7,164 $(2,514 )
(Stated in millions)
Six Months Ended
Jun. 30, 2017 Jun. 30, 2016
Revenue Income Before Taxes Revenue Income Before Taxes
Reservoir Characterization $3,377 $580 $3,305 $601
Drilling 4,092 531 4,527 542
Production 4,683 331 4,497 288
Cameron 2,494 336 1,525 250
Eliminations & other (290 ) (71 ) (170 ) (33 )
Pretax operating income 1,707 1,648
Corporate & other (480 ) (414 )
Interest income((1)) 52 37
Interest expense((1)) (254 ) (256 )
Charges & credits (674 ) (2,908 )
$14,356 $351 $13,684 $(1,893 )
((1)) Excludes interest included in the Product Groups results.
Certain prior period items have been reclassified to conform to the current
period presentation.
Supplemental Information
1) What is the capex guidance for the full year 2017?
Capex (excluding multiclient and SPM investments) is expected to be
$2.2 billion for 2017.
2) What was the cash flow from operations for the second quarter of 2017?
Cash flow from operations for the second quarter of 2017 was $858
million and included approximately $90 million of severance payments.
3) What was the cash flow from operations for the first half of 2017?
Cash flow from operations for the first half of 2017 was $1.5
billion and included approximately $230 million of severance
payments.
4) What was included in “Interest and other income” for the second quarter of
2017?
“Interest and other income” for the second quarter of 2017 was $62
million. This amount consisted of earnings of equity method
investments of $28 million and interest income of $34 million.
5) How did interest income and interest expense change during the second quarter
of 2017?
Interest income of $34 million was $5 million higher sequentially.
Interest expense of $142 million was $3 million higher sequentially.
6) What is the difference between pretax operating income and Schlumberger’s
consolidated income before taxes?
The difference principally consists of corporate items (including
charges and credits) and interest income and interest expense not
allocated to the segments as well as stock-based compensation
expense, amortization expense associated with certain intangible
assets (including intangible asset amortization expense resulting
from the acquisition of Cameron), certain centrally managed
initiatives, and other nonoperating items.
7) What was the effective tax rate (ETR) for the second quarter of 2017?
The ETR for the second quarter of 2017, calculated in accordance with GAAP,
was 590% as compared to 14.8% for the first quarter of 2017. The ETR for the
second quarter of 2017, excluding charges and credits, was 18.9% as compared
to 15.3% for the first quarter of 2017.
8) How many shares of common stock were outstanding as of June 30, 2017 and how
did this change from the end of the previous quarter?
There were 1.385 billion shares of common stock outstanding as of
June 30, 2017. The following table shows the change in the number of
shares outstanding from March 31, 2017 to June 30, 2017.
(Stated in millions)
Shares outstanding at March 31, 2017 1,389
Shares sold to optionees, less shares exchanged -
Vesting of restricted stock 1
Shares issued under employee stock purchase plan -
Stock repurchase program (5)
Shares outstanding at June 30, 2017 1,385
9) What was the weighted average number of shares outstanding during the second
quarter of 2017 and first quarter of 2017 and how does this reconcile to the
average number of shares outstanding, assuming dilution used in the
calculation of diluted earnings per share, excluding charges and credits?
The weighted average number of shares outstanding during the second
quarter of 2017 was 1.387 billion and 1.393 billion during the first
quarter of 2017.
The following is a reconciliation of the weighted average shares
outstanding to the average number of shares outstanding, assuming
dilution, used in the calculation of diluted earnings per share,
excluding charges and credits.
(Stated in millions)
Second Quarter 2017 First Quarter 2017
Weighted average shares outstanding 1,387 1,393
Assumed exercise of stock options 1 4
Unvested restricted stock 5 5
Average shares outstanding, assuming dilution 1,393 1,402
10) What was the unamortized balance of Schlumberger’s investment in SPM
projects at June 30, 2017 and how did it change as compared to December 31,
2016?
The unamortized balance of Schlumberger’s investments in SPM
projects was approximately $2.6 billion and $2.5 billion at June 30,
2017 and December 31, 2016, respectively. These amounts are included
within Other Assets in Schlumberger’s Condensed Consolidated Balance
Sheet. The change in the unamortized balance of Schlumberger’s
investment in SPM projects was as follows:
(Stated in millions)
Balance at December 31, 2016 $2,458
SPM investments 328
Amortization of SPM investment (213 )
Balance at June 30, 2017 $2,573
11) What was the amount of WesternGeco multiclient sales in the second quarter of
2017?
Multiclient sales, including transfer fees, were $182 million in the
second quarter of 2017 and $138 million in the first quarter of 2017.
12) What was the WesternGeco backlog at the end of the second quarter of 2017?
WesternGeco backlog, which is based on signed contracts with
customers, was $566 million at the end of the second quarter of
2017. It was $613 million at the end of the first quarter of 2017.
13) What were the orders and backlogs for Cameron Group’s OneSubsea and Drilling
Systems businesses?
OneSubsea and Drilling Systems orders and backlogs were as follows:
(Stated in millions)
Orders Second Quarter First Quarter
2017 2017
OneSubsea $181 $546
Drilling Systems $170 $174
Backlog (at the end of period)
OneSubsea $2,371 $2,634
Drilling Systems $566 $608
14) What is included in Impairments & other on Schlumberger’s Condensed
Consolidated Statement of Income (Loss) for the second quarter of 2017?
During the second quarter of 2017, Schlumberger recorded $510
million of pretax charges that are classified in Impairments &
other. The vast majority of this amount relates to a financing
agreement that Schlumberger entered into with its primary customer
in Venezuela. This agreement resulted in the exchange of $700
million of outstanding accounts receivable for an interest bearing
promissory note. Schlumberger recorded this note at its estimated
fair value on the date of exchange, which resulted in a charge.
Schlumberger Limited Simon Farrant - Schlumberger Limited, Vice President of
Investor Relations Joy V. Domingo - Schlumberger Limited, Manager of Investor
Relations Office +1 (713) 375-3535 investor-relations@slb.com
(mailto:investor-relations@slb.com)
About Schlumberger
Schlumberger is the world's leading provider of technology for reservoir
characterization, drilling, production, and processing to the oil and gas
industry. Working in more than 85 countries and employing approximately
100,000 people who represent over 140 nationalities, Schlumberger supplies the
industry's most comprehensive range of products and services, from exploration
through production, and integrated pore-to-pipeline solutions that optimize
hydrocarbon recovery to deliver reservoir performance.
Schlumberger Limited has principal offices in Paris, Houston, London and The
Hague, and reported revenues of $27.81 billion in 2016. For more information,
visit www.slb.com
(http://cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fwww.slb.com&esheet=51591917&newsitemid=20170721005268&lan=en-US&anchor=www.slb.com&index=1&md5=b92af93ddc5c6c8c4d41c2f3f3d837a5)
.
*Mark of Schlumberger or of Schlumberger companies.
(†)Japan Oil, Gas and Metals National Corporation (JOGMEC), formerly Japan
National Oil Corporation (JNOC), and Schlumberger collaborated on a research
project to develop logging while drilling (LWD) technology that reduces the
need for traditional chemical sources. Designed around the pulsed neutron
generator (PNG), EcoScope service uses technology that resulted from this
collaboration. The PNG and the comprehensive suite of measurements in a single
collar are key components of the EcoScope service that deliver game-changing
LWD technology.
Notes
Schlumberger will hold a conference call to discuss the earnings press release
and business outlook on Friday, July 21, 2017. The call is scheduled to begin
at 8:30 a.m. US Eastern Time. To access the call, which is open to the public,
please contact the conference call operator at +1 (800) 288-8967 within North
America, or +1 (612) 333-4911 outside North America, approximately 10 minutes
prior to the call’s scheduled start time. Ask for the “Schlumberger
Earnings Conference Call.” At the conclusion of the conference call an audio
replay will be available until August 21, 2017 by dialing +1 (800) 475-6701
within North America, or +1 (320) 365-3844 outside North America, and
providing the access code 423510.
The conference call will be webcast simultaneously at www.slb.com/irwebcast
(http://cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fwww.slb.com%2Firwebcast&esheet=51591917&newsitemid=20170721005268&lan=en-US&anchor=www.slb.com%2Firwebcast&index=2&md5=12a323966beea9d8fa75c5151b337820)
on a listen-only basis. A replay of the webcast will also be available at the
same web site until August 31, 2017.
This second-quarter 2017 earnings release, as well as other statements we
make, contain “forward-looking statements” within the meaning of the
federal securities laws, which include any statements that are not historical
facts, such as our forecasts or expectations regarding business outlook;
growth for Schlumberger as a whole and for each of its segments (and for
specified products or geographic areas within each segment); oil and natural
gas demand and production growth; oil and natural gas prices; improvements in
operating procedures and technology, including our transformation program;
capital expenditures by Schlumberger and the oil and gas industry; the
business strategies of Schlumberger’s customers; the anticipated benefits of
the Cameron transaction; the success of Schlumberger’s joint ventures and
alliances; future global economic conditions; and future results of
operations. These statements are subject to risks and uncertainties,
including, but not limited to, global economic conditions; changes in
exploration and production spending by Schlumberger’s customers and changes
in the level of oil and natural gas exploration and development; general
economic, political and business conditions in key regions of the world;
foreign currency risk; pricing pressure; weather and seasonal factors;
operational modifications, delays or cancellations; production declines;
changes in government regulations and regulatory requirements, including those
related to offshore oil and gas exploration, radioactive sources, explosives,
chemicals, hydraulic fracturing services and climate-related initiatives; the
inability of technology to meet new challenges in exploration; the inability
to integrate the Cameron business and to realize expected synergies; the
inability to retain key employees; and other risks and uncertainties detailed
in this second-quarter 2017 earnings release and our most recent Forms 10-K,
10-Q, and 8-K filed with or furnished to the Securities and Exchange
Commission. If one or more of these or other risks or uncertainties
materialize (or the consequences of any such development changes), or should
our underlying assumptions prove incorrect, actual outcomes may vary
materially from those reflected in our forward-looking statements.
Schlumberger disclaims any intention or obligation to update publicly or
revise such statements, whether as a result of new information, future events
or otherwise.
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Schlumberger Limited
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