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TheStreet Open House

Schlumberger NV
SLB : NYSE : Basic Materials
$104.93 1.88 | 1.82%
Today's Range: 102.86 - 105.12
Avg. Daily Volume: 5,866,100
09/16/14 - 11:46 AM ET

Financial Analysis


SCHLUMBERGER LTD's gross profit margin for the second quarter of its fiscal year 2014 is essentially unchanged when compared to the same period a year ago. Even though sales increased, the net income has decreased. SCHLUMBERGER LTD has strong liquidity. Currently, the Quick Ratio is 1.55 which shows the ability to cover short-term cash needs. The company's liquidity has increased from the same period last year, indicating improving cash flow.

During the same period, stockholders' equity ("net worth") has increased by 9.82% from the same quarter last year. The key liquidity measurements indicate that the company is unlikely to face financial difficulties in the near future.

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Income Statement Q2 FY14 Q2 FY13
Net Sales ($mil)12055.011182.0
EBITDA ($mil)3276.02987.0
EBIT ($mil)2352.02077.0
Net Income ($mil)1595.02095.0


Balance Sheet Q2 FY14 Q2 FY13
Cash & Equiv. ($mil)6699.05925.0
Total Assets ($mil)68086.063251.0
Total Debt ($mil)13245.011956.0
Equity ($mil)40536.036909.0


Profitability Q2 FY14 Q2 FY13
Gross Profit Margin30.7730.23
EBITDA Margin27.1726.71
Operating Margin19.5118.57
Sales Turnover0.690.69
Return on Assets9.649.7
Return on Equity16.716.51
Debt Q2 FY14 Q2 FY13
Current Ratio2.071.91
Debt/Capital0.250.24
Interest Expense90.098.0
Interest Coverage26.1321.19


Share Data Q2 FY14 Q2 FY13
Shares outstanding (mil)1296.441323.18
Div / share0.40.31
EPS1.371.66
Book value / share31.2727.89
Institutional Own % n/a n/a
Avg Daily Volume5859259.05530228.0

Valuation


BUY. The current P/E ratio indicates a premium compared to an average of 19.76 for the Energy Equipment & Services industry and a value on par with the S&P 500 average of 19.69. For additional comparison, its price-to-book ratio of 3.27 indicates a premium versus the S&P 500 average of 2.72 and a premium versus the industry average of 3.20. The price-to-sales ratio is well above both the S&P 500 average and the industry average, indicating a premium. Upon assessment of these and other key valuation criteria, SCHLUMBERGER LTD proves to trade at a premium to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
SLB 19.93 Peers 19.76   SLB 12.51 Peers 12.01

Average. An average P/E ratio can signify an industry neutral price for a stock and an average growth expectation.

SLB is trading at a valuation on par with its peers.

 

Average. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

SLB is trading at a valuation on par to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
SLB 15.03 Peers 16.82   SLB 1.78 Peers 1.49

Average. An average price-to-projected earnings ratio can signify an industry neutral stock price and average future growth expectations.

SLB is trading at a valuation on par with its peers.

 

Premium. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

SLB trades at a premium to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
SLB 3.27 Peers 3.20   SLB 12.50 Peers 24.64

Average. A lower price-to-book ratio makes a stock more attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

SLB is trading at a valuation on par with its peers.

 

Lower. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

However, SLB is expected to significantly trail its peers on the basis of its earnings growth rate.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
SLB 2.83 Peers 2.18   SLB 8.01 Peers 9.68

Premium. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

SLB is trading at a significant premium to its industry.

 

Lower. A sales growth rate that trails the industry implies that a company is losing market share.

SLB trails its peers on the basis of sales growth

 

 

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