Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.
NEW YORK (
) has been reiterated by TheStreet Ratings as a hold with a ratings score of C. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, revenue growth and increase in stock price during the past year. However, as a counter to these strengths, we find that the company's profit margins have been poor overall.
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Highlights from the ratings report include:
- SCHLUMBERGER LTD has improved earnings per share by 28.6% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, SCHLUMBERGER LTD increased its bottom line by earning $5.11 versus $3.91 in the prior year. This year, the market expects an improvement in earnings ($5.70 versus $5.11).
- Despite its growing revenue, the company underperformed as compared with the industry average of 9.3%. Since the same quarter one year prior, revenues slightly increased by 7.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Energy Equipment & Services industry average. The net income increased by 22.1% when compared to the same quarter one year prior, going from $1,363.00 million to $1,664.00 million.
- Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Looking ahead, our view is that this company's fundamentals will not have much impact in either direction, allowing the stock to generally move up or down based on the push and pull of the broad market.
- The gross profit margin for SCHLUMBERGER LTD is currently lower than what is desirable, coming in at 31.10%. Regardless of SLB's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, SLB's net profit margin of 13.97% compares favorably to the industry average.
Schlumberger Limited, together with its subsidiaries, supplies technology, integrated project management, and information solutions to oil and gas exploration and production industries worldwide. It operates through three groups: Reservoir Characterization, Drilling, and Production. Schlumberger has a market cap of $115.6 billion and is part of the basic materials sector and energy industry. The company has a P/E ratio of 18.00, above the S&P 500 P/E ratio of 18.00. Shares are down 3.1% year to date as of the close of trading on Wednesday.
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--Written by a member of TheStreet Ratings Staff.