Schlumberger Ltd. (SLB 0.52%) on April 16 reported mix first-quarter results that were noticeably affected by weak oil prices. There were a few good items in the report -- the oil-field services giant blew past analysts' earnings estimates and produced gobs of free cash flow. However, the company still missed on revenue expectations and is cutting another 11,000 jobs. Here are three critical takeaways from the report.

No. 1: Down, but not out
The weak oil market had an obvious impact on Schlumberger's first-quarter results. Revenue of $10.2 billion was down 19% from the prior quarter and missed analysts' consensus estimate by $210 million. Earnings of $1.06 per share beat the estimate by $0.15 per share, but were still down 29% from the prior quarter. That's not the direction investors want to see revenue and earnings heading, but considering that oil prices have fallen by 50%, drastically slowing oil and gas drilling activity, the company is doing the best it can under the circumstances.

Despite those challenges, Schlumberger produced a whopping $1.2 billion in free cash flow in the quarter, excluding a restructuring payment, which was 74% higher than last year. One reason for that level of free cash flow is a drastic cutback in capital expenditures -- Schlumberger plans to spend $2.5 billion in 2015, down from $4 billion last year. The company is instead buying back its stock, including $719 million worth of shares in the first quarter, which this chart shows was a good time to be buying the stock.

SLB Chart

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No 2: Focused on what it can control
Schlumberger also continues to adjust to the current market. That's why the company cut another $500 million from its capex plan and also eliminated those 11,000 jobs (trimming its workforce by 15% from its peak in the third quarter of last year). Because it can't control its market environment, Schlumberger is "focused on what we can control," CEO Paal Kibsgaard said in the company's earnings press release. And what the company can control are its internal costs.

The company sees its ability to adapt as being a key driver in taking market share in this environment. It is working with customers to drive down their per-barrel costs by having them implement new technologies, which will lead to new sales of higher-margin products for the company. This should enable Schlumberger to deliver superior EPS performance compared to its peers.

No. 3: No quick recovery
Given its close working relationship with oil companies around the world Schlumberger has its finger on the pulse of the industry. This gives it keen insights regarding what is on the horizon. In commenting on the current market outlook, Kibsgaard said the global economy continues to grow, which is why expectations still remain that global oil demand will increase by 1 million barrel a day over last year's demand. However, oil companies' dramatic capex reductions are starting to impact supply, which "is expected to tighten further in the second half of the year," according to the CEO.

That said, he is concerned about the large buildup of U.S. wells that have been drilled but left uncompleted. That inventory will delay a recovery in drilling activity in the U.S.; according to Kibsgaard, "a recovery in activity will fall well short of reaching previous levels, hence extending the period of pricing weakness." That will constrain oil-field service margins and could impact Schlumberger's profitability in future quarters even if oil prices are much stronger.

Investor takeaway
Schlumberger is doing about as good as can be expected in the current market environment. Its revenue and earnings are down, and it is focused on conserving cash because it doesn't see a quick recovery in drilling activity. It is using its excess cash flow to buy back stock so that it can be in a better position to deliver strong returns for investors when market conditions do improve.