Should You Purchase Schlumberger Shares Following Q4 Results?

Briefly

  • Schlumberger presented impressive Q4 results.
  • Total revenues surged 12.5% year on year.
  • Schlumberger reduced its debt.

Schlumberger (NYSE: SLB) saw its shares gaining over 20% since 2022 started. Furthermore, the firm reported massive Q4 results last Friday.

Schlumberger Lowering its Debt

Schlumberger supplies reservoir drilling, characterization, production, and processing technologies to the gas and oil industry globally. On Friday, the company revealed its Q4 results. Its total revenues surged 12.5% year/year towards $6.22B, $130 million beyond expectations. On the other side, non-GAAP earnings stood at $0.41 per share, dropping by $0.02.

Q4 earnings per share barring credits and charges surged by $0.05 since the past quarter. Meanwhile, the EBITDA margin stabilized at 22.2%. All divisions recorded successive growth. The Digital and Integration led as North America revenue noted a 13% growth. Furthermore, international revenue gained 5%.

Digital and Integration witnessed a 10% increase to $889 million. That might be because of high exploration and digital data licensing sales. Meanwhile, an 8% Y/Y surge saw the Reservoir performance revenue at $1.3 billion. On the other side, Well Construction saw its revenue surging 5% to $2.4 billion in Q4. Lastly, Production Systems revenue noted a 5% sequential surge to $1.8 billion, triggered by year-end sales and new offshore projects.

Schlumberger generated around $4.7 billion cash flow via operations and about $3 billion full monetary year free cash flow. That way, the company ended the year within its net deficit totaling $11.1 billion. Meanwhile, Schlumberger reduced its debt by almost $2.8B compared to 2020 end figures. With that, the firm recorded its lowest net debt within the past five years.

Oliver Le Peuch, the CEO, stated that the industry has lucrative macro fundaments this year because of the projected demand recovery, supportive oils prices, and tight supply markets. Peuch trusts such developments will lead to a material upgrade in industry funds spending with double-digit surges in the North American and international marketplace.

On a fundamental view, Schlumberger traders about 10-times TTM EBITDA. Moreover, its market cap at 451.9 billion makes its shares not expensive. Furthermore, the company’s balance sheet appears steady, the current dividend yield standing around 1.4%. With that, the firm’s shares might ensure massive returns to long-term market players.

Technical Analysis

A climb past the resistance at $40 backs the upward trend. That would reveal the net target at $43. Meanwhile, losing the support of $35 will display a ‘sell’ signal, clearing the path to $30.

Final Thought Schlumberger reported promising Q4 results on Friday, and the firm’s CEO Olivier Le Peuch believes the company has favorable macro fundamentals. The total revenue surged by 12.5% year on year towards $6.22 billion in Q4. Moreover, Schlumberger reduced its debt by around $2.8 billion than 2020 end.

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One thought on “Should You Purchase Schlumberger Shares Following Q4 Results?

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