Why Schlumberger (SLB) Stock Is Lower Today

NEW YORK (TheStreet) -- Shares of Schlumberger Ltd. (SLB) are down 3.73% to $99.43 after it was reported that the major oilfield services provider is removing employees who are citizens of the U.S. and the EU from Russia amid sanctions, sources told Bloomberg.

About 20 mid-level and senior managers will be pulled, sources added.

The U.S. and the EU targeted Russia's oil industry by banning exports of some equipment and technology after Russia annexed Crimea and allegedly stoked a separatist insurgency in eastern Ukraine, Bloomberg noted.

 

TheStreet Ratings team rates SCHLUMBERGER LTD as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:

"We rate SCHLUMBERGER LTD (SLB) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, good cash flow from operations and reasonable valuation levels. We feel these strengths outweigh the fact that the company has had sub par growth in net income."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • SLB's revenue growth trails the industry average of 19.2%. Since the same quarter one year prior, revenues slightly increased by 7.8%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • The current debt-to-equity ratio, 0.33, is low and is below the industry average, implying that there has been successful management of debt levels. To add to this, SLB has a quick ratio of 1.55, which demonstrates the ability of the company to cover short-term liquidity needs.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Energy Equipment & Services industry and the overall market on the basis of return on equity, SCHLUMBERGER LTD has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
  • SCHLUMBERGER LTD's earnings per share declined by 17.5% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. 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 ($5.65 versus $5.11).
  • Net operating cash flow has increased to $2,584.00 million or 13.53% when compared to the same quarter last year. Despite an increase in cash flow, SCHLUMBERGER LTD's cash flow growth rate is still lower than the industry average growth rate of 24.93%.
  • You can view the full analysis from the report here: SLB Ratings Report
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