NEW YORK (TheStreet) -- Since reaching a high of $77.84 on May 21, shares of energy giant Schlumberger (SLB) have been down by as much as 10%, reaching a low of $70.25 on June 24. Since then, however, the stock has bounced back, gaining as much as 9% on virtually no news at all. (SLB closed Wednesday at $82.16.)This pretty much explains the volatile nature of the oil services sector. Investors have had a hard time making up their minds on this sluggish industry, which has been hurt by feeble prices and soft rig counts. Although Schlumberger has been by far the leader of a group that includes rivals Halliburton ( HAL) and Baker Hughes ( BHI), Schlumberger has had a tough time overcoming weakness in North America. By contrast, Halliburton, which has long played second fiddle to Schlumberger, is now performing extremely well in international markets. This has begun to make the battle between the two giants all the more interesting. In other words, the gap between the two companies is not as wide as it used to be. This has now placed Schlumberger under a microscope. Investors are now wondering if the stock, which has always received the benefit of the doubt, still deserves the same level of respect.
With each segment performing so well, it came as no surprise that operating income grew 9% year over year and 13% from the April the quarter. Even more impressive was the fact that despite the perpetual weakness in North America and the sluggishness in Latin America, management was able to grow margins both on a year-over-year basis and sequentially. Given the fragile nature of this sector, I can't take for granted how hard of an accomplishment this is, especially when Baker Hughes missed its margin estimates. I'm not suggesting this was a blowout quarter for Schlumberger. But I do believe the company has shown plenty of signs that the worst is over and better results are on the way. If nothing else, it's reassuring that management continues to show that it can do more with less while also laying out steps to grow earnings-per-share faster than revenue. Along those lines, one of the stated goals is the company wants to establish the highest margins in North America. Follow @saintssense This article was written by an independent contributor, separate from TheStreet's regular news coverage.