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Schlumberger (SLB) releases its 1st quarter 2013 earnings this Friday, April 19th at 9:00 am ET. Below I have provided an update of the quarter as well as an overview of earnings expectations.

Profile and Estimates

Schlumberger has a market cap of $97.55 billion and currently trades for $70.79 per share. Shares are up 6.17% YTD and trade 21.12% above their 52 week low of $58.45. Analysts have a mean target price of $91.50 and a median price target of $92.00 on the shares. Thirty two analysts have an average first quarter earnings per share estimate of $0.99 on estimated revenues of $10.75 billion. Schlumberger has beat earnings estimates in the last four quarters.

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Fundamentals and Highlights

Positives

  • Dividend yield of 1.55%.
  • Wide product and diversified geographic range.
  • Revenue growth of 22.6% (3 year average) over the industry average of 6.5%.
  • Operating margin of 17%, net margin of 13% and ROE of 16.6 which are all above the industry averages 14.7%, 8.7% and 12 respectively.
  • D/E of 0.3 which is below the industry averages 0.4.
  • Working capital has increased in each of the last 6 years, came in at $11.788 billion last year.
  • Positive history of successful acquisitions and fruit from research and development spending, such as SLB's Q-technology and HiWAY fracturing technique.

Negatives

  • P/B of 2.8 and P/S of 2.3 which are above the industry averages 2.0 and 1.5 respectively.
  • Free cash flow has declined in each of the last 5 years, came in at $1.786 billion last year.
  • ROIC has been declining over the past 6 years, was 11.95% last year.
  • Susceptible to high currency exchange risk.

Take Away

Schlumberger shares have pulled back from their mid-February highs and are starting to look more and more attractive. I have owned shares in the past and always have an eye on picking up more. Should an earnings miss lead to a further pullback, investors would be offered a very attractive and growing company at only a cheaper price.

Source: Last Minute Schlumberger Earnings Preview