NEW YORK (TheStreet) -- Shares of Schlumberger (SLB) are declining, down 0.59% to $86.15 in morning trading Monday, after Credit Suisse lowered its 2015 earnings estimates to $3.50 from $3.90, with 2016 earnings estimates decreased to $3.51 from $3.88.
The firm maintained its "outperform" rating and a price target of $86.
"GoM (Gulf of Mexico) continues to be a much better market than onshore U.S., but is likely to see some margin decline on mix of higher workovers and completions in a flat activity market," Credit Suisse analysts said.
Additionally, West Africa and the North Sea have been challenged with lack of exploration success in the former and a dramatic slowdown and layoff effort in the latter, Credit Suisse noted.
Schlumberger is a supplier of technology, integrated project management and information solutions to the international oil and gas exploration and production industry.
Separately, 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 several positive factors, 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 largely solid financial position with reasonable debt levels by most measures and good cash flow from operations. We feel its strengths outweigh the fact that the company has had somewhat weak growth in earnings per share."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The current debt-to-equity ratio, 0.34, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.18, which illustrates the ability to avoid short-term cash problems.
- Net operating cash flow has slightly increased to $1,770.00 million or 8.25% when compared to the same quarter last year. Despite an increase in cash flow, SCHLUMBERGER LTD's average is still marginally south of the industry average growth rate of 12.07%.
- SLB, with its decline in revenue, slightly underperformed the industry average of 1.9%. Since the same quarter one year prior, revenues slightly dropped by 8.8%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- The change in net income from the same quarter one year ago has exceeded that of the Energy Equipment & Services industry average, but is less than that of the S&P 500. The net income has significantly decreased by 38.8% when compared to the same quarter one year ago, falling from $1,592.00 million to $975.00 million.
- The share price of SCHLUMBERGER LTD has not done very well: it is down 23.88% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. Looking ahead, although the push and pull of the overall market trend could certainly make a critical difference, we do not see any strong reason stemming from the company's fundamentals that would cause a continuation of last year's decline. In fact, the stock is now selling for less than others in its industry in relation to its current earnings.
- You can view the full analysis from the report here: SLB Ratings Report