Oilfield service firms may suffer Russia earnings hit, analysts say

dgdimension/iStock via Getty Images

Schlumberger (SLB -2.7%), Halliburton (HAL -3.4%) and Baker Hughes (BKR -3.2%) all turn sharply lower following reports from J.P. Morgan Chase and Citigroup that say earnings for the oilfield service providers likely will be impaired from working in Russia; ETF: OIH

As reported by Bloomberg, J.P. Morgan estimates Russia makes up as much as 8% of total sales for Schlumberger, and Citi says the company's margins in the country are in the high teens in Russia; JPM says Baker Hughes has the second highest exposure to Russia, while Halliburton gets as much as 2% of revenue from the country.

The companies have not disclosed any change in plans for their Russian operations, but "even if the Big 3 will be able to legally continue work in Russia, it is possible that pressure could mount from shareholders to exit the country," according to JPM analyst Arun Jayaram.

However, "with sanctions so far largely sparing Russia's energy sector, we believe that most operations of the Big 3 in Russia will continue for the time being," Jayaram writes.

U.S. WTI crude oil futures have topped $100/bbl Tuesday, its highest level since July 2014.