Business Wire India
Schlumberger Limited (NYSE: SLB) reported results for full-year 2019 and the fourth quarter of 2019.
| Full-Year Results | (Stated in millions, except per share amounts) | ||||||||
|
Twelve Months Ended |
|
Change |
|||||||
|
Dec. 31, 2019 |
|
Dec. 31, 2018 |
|
Year-on-year |
|||||
| Revenue |
$32,917 |
|
$32,815 |
|
0% |
||||
| Income (loss) before taxes - GAAP basis |
$(10,418) |
|
$2,624 |
|
n/m |
||||
| Pretax segment operating income* |
$3,978 |
|
$4,187 |
|
-5% |
||||
| Pretax segment operating margin* |
12.1% |
|
12.8% |
|
-68 bps |
||||
| Net income (loss) - GAAP basis |
$(10,137) |
|
$2,138 |
|
n/m |
||||
| Net income, excluding charges & credits* |
$2,054 |
|
$2,261 |
|
-9% |
||||
| Diluted EPS (loss per share) - GAAP basis |
$(7.32) |
|
$1.53 |
|
n/m |
||||
| Diluted EPS, excluding charges and credits* |
$1.47 |
|
$1.62 |
|
-9% |
||||
|
|
|||||||||
| Full-Year Revenue by Area |
|
||||||||
|
|
|||||||||
| North America |
$10,843 |
|
11,984 |
|
-10% |
||||
| Latin America |
4,149 |
|
3,745 |
|
11% |
||||
| Europe/CIS/Africa |
7,683 |
|
7,158 |
|
7% |
||||
| Middle East & Asia |
10,017 |
|
9,543 |
|
5% |
||||
| Other |
225 |
|
385 |
|
n/m |
||||
|
$32,917 |
|
$32,815 |
|
0% |
|||||
|
|
|||||||||
| North America revenue |
$10,843 |
|
$11,984 |
|
-10% |
||||
| International revenue |
$21,849 |
|
$20,446 |
|
7% |
||||
|
|
|||||||||
| North America revenue, excluding Cameron |
$8,525 |
|
$9,556 |
|
-11% |
||||
| International revenue, excluding Cameron |
$18,874 |
|
$17,439 |
|
8% |
||||
| *These are non-GAAP financial measures. See section titled "Charges & Credits" for details. | |||||||||
| n/m = not meaningful | |||||||||
Schlumberger CEO Olivier Le Peuch commented, “Full-year revenue for 2019 was $32.9 billion, a level essentially flat with 2018. Overall performance was positive—particularly in the international markets—and we generated $2.7 billion in free cash flow, which was a remarkable achievement under these market conditions. Full-year pretax segment operating margin of 12%, however, was slightly down year-on-year.
“International revenue, excluding Cameron, grew 8% and was consistent with our expectations of high single-digit growth. Most of our international GeoMarkets benefited from these favorable market conditions, and almost half of them registered double-digit, year-on-year revenue growth driven by exploration activity, offshore operations, and acceleration of the industry’s digital transformation. Compared with the first half of 2019, international pretax segment operating margin improved by 100 basis points (bps) in the second half of the year—a firm step toward our strategic target of margin expansion.
“In contrast, after two years of strong growth, North American revenue fell sharply, driven largely by the land market weakness affecting our OneStim® pressure pumping business, as customers reached their budget limits earlier in the year and remained highly disciplined on capital spend.
| (Stated in millions) | |||||||||
| Full-Year Revenue by Segment |
Twelve Months Ended |
|
Change |
||||||
|
Dec. 31, 2019 |
|
Dec. 31, 2018 |
|
Year-on-year |
|||||
| Reservoir Characterization |
$6,312 |
|
6,173 |
|
2% |
||||
| Drilling |
9,721 |
|
9,250 |
|
5% |
||||
| Production |
11,987 |
|
12,394 |
|
-3% |
||||
| Cameron |
5,336 |
|
5,520 |
|
-3% |
||||
| Other |
(439) |
|
(522) |
|
n/m |
||||
|
$32,917 |
|
$32,815 |
|
0% |
|||||
| n/m = not meaningful | |||||||||
“Among the business segments, Drilling and Reservoir Characterization revenue benefited from their international market exposure, while Production and Cameron contracted year-on-year due to weakness in the North America land market.
“During the year, we recognized material pretax charges driven by market conditions, particularly in North America. As these charges were largely noncash and primarily related to goodwill, intangible assets, and fixed assets, they did not impede our ability to generate strong cash flow as we demonstrated in the second half of the year.
“We ended the year building on the strength of our international franchise, driven by the breadth of the international recovery, after four consecutive years of declining revenue. We initiated our scale-to-fit strategy in North America land amid continued challenging market conditions, removed structural costs to protect margins, and accelerated technology-access business models and asset-light operations transformation.
“The year 2019 marked the beginning of a new chapter for Schlumberger. As we move forward, our vision is to define and drive high performance sustainably—operationally and financially. Simply put, we want to be the performance partner of choice for the benefit of our customers and our industry. Our strategy has favorably positioned Schlumberger to achieve margin expansion, increase return on capital, and grow free cash flow.
| Fourth-Quarter Results | (Stated in millions, except per share amounts) | |||||||||||
|
Three Months Ended |
|
Change |
||||||||||
|
Dec. 31, 2019 |
|
Sept. 30, 2019 |
|
Dec. 31, 2018 |
|
Sequential |
|
Year-on-year |
||||
| Revenue |
$8,228 |
|
$8,541 |
|
$8,180 |
|
-4% |
|
1% |
|||
| Income (loss) before taxes - GAAP basis |
$452 |
|
$(11,971) |
|
$648 |
|
n/m |
|
-30% |
|||
| Pretax segment operating income* |
$1,006 |
|
$1,096 |
|
$967 |
|
-8% |
|
4% |
|||
| Pretax segment operating margin* |
12.2% |
|
12.8% |
|
11.8% |
|
-60 bps |
|
40 bps |
|||
| Net income (loss) - GAAP basis |
$333 |
|
$(11,383) |
|
$538 |
|
n/m |
|
-38% |
|||
| Net income, excluding charges & credits* |
$545 |
|
$596 |
|
$498 |
|
-9% |
|
9% |
|||
| Diluted EPS (loss per share) - GAAP basis |
$0.24 |
|
$(8.22) |
|
$0.39 |
|
n/m |
|
-38% |
|||
| Diluted EPS, excluding charges & credits* |
$0.39 |
|
$0.43 |
|
$0.36 |
|
-9% |
|
8% |
|||
|
|
|
|
||||||||||
| North America revenue |
$2,454 |
|
$2,850 |
|
$2,820 |
|
-14% |
|
-13% |
|||
| International revenue |
$5,721 |
|
$5,629 |
|
$5,284 |
|
2% |
|
8% |
|||
|
|
|
|
||||||||||
| North America revenue, excluding Cameron |
$1,907 |
|
$2,261 |
|
$2,235 |
|
-16% |
|
-15% |
|||
| International revenue, excluding Cameron |
$4,892 |
|
$4,857 |
|
$4,526 |
|
1% |
|
8% |
|||
| *These are non-GAAP financial measures. See sections titled "Charges & Credits" and "Segments" for details. | ||||||||||||
| n/m = not meaningful | ||||||||||||
“Fourth quarter revenue of $8.2 billion was 4% lower sequentially. International revenue of $5.7 billion grew 2% sequentially and 8% year-on-year. North America revenue of $2.5 billion, however, dropped 14% sequentially due to customer budget exhaustion and cash flow constraints.
“Sequential international growth was led by the Middle East & Asia area, where revenue increased 5% driven by higher year-end product sales in Kuwait, Iraq, and Oman; delivery of additional lump-sum-turnkey (LSTK) wells in Saudi Arabia; and increased Well Services activity in Qatar. Latin America revenue grew 1% due to stronger WesternGeco® multiclient seismic license sales in the Mexico Bay of Campeche, while revenue in the Europe/CIS/Africa area only declined 2% given the mild winter slowdown of activity in the Northern Hemisphere that was partially mitigated by strong year-end product sales and Software Integrated Solutions (SIS) digital software sales.
