Schlumberger Earnings: Drilling Profits?

The following video is part of our "Motley Fool Conversations" series, in which senior analyst Michael Olsen discusses topics around the investing world.

Oil and gas services giant Schlumberger released earnings Friday, and while near-term margins are likely to remain under pressure, as oil and gas companies relocate drilling activity from natural gas to liquids-focused regions, Mike sees an opportunity in this sentiment. The industry's experienced its share of cyclicality, but cycles are just that -- short-term. He's also encouraged by recent contract wins and strength in deepwater and International revenues and margins. 

Across the longer term, Mike sees upside from increasing offshore and deepwater activity, Schlumberger's bread and butter; a recovery in natural gas-focused drilling, as natural gas prices perk up; greater demand for national oil companies, with which Schlumberger has strong relationships; and greater service intensivity, which should boost the top line and margins. At today's price, Mike thinks the shares are worth a look.

As oil prices climb, investors can find opportunities to ride the wave of surging profits for energy companies. Take a look at the top oil stocks recommended by Motley Fool analysts in a recent special free report: "3 Stocks for $100 Oil." The report won't be available forever, so we invite you to enjoy a free copy today. You can access it by clicking here. Fool on!

Michael Olsen owns shares of ExxonMobil. The Motley Fool owns shares of Halliburton. Motley Fool newsletter services recommend Halliburton and Schlumberger. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


Read/Post Comments (0) | Recommend This Article (3)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

DocumentId: 1868741, ~/Articles/ArticleHandler.aspx, 4/23/2014 8:37:20 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement