Oil field services and energy technology group Schlumberger (SLB) is set to release its Q2 earnings report this week. This has some investors wondering whether it’s a good idea to buy shares of SLB beforehand.
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What Wall Street Expects
Wall Street is expecting SLB to report earnings of $0.75 per share on $8.51 billion in sales. This would represent a 4% decline in earnings and a 7% fall in sales compared to the previous year’s figures of $0.78 per share and $9.15 billion.
Will SLB be able to beat these estimates? As can be seen below it has a very good track record in doing just that.
Key Insights Ahead of Earnings
SLB reported a 3% drop in its first quarter revenue with international revenue decreasing by 5% due to reduced activity in several key regions. It saw significant revenue decline in Russia, Mexico, and Saudi Arabia.
It said that an evolving tariff landscape and global economic uncertainty were posing challenges, with tariffs impacting import and export flows between the US and China.
These worries have certainly weighed heavily on the company’s share price this year.
Just a month ago CEO Olivier Le Peuch said the company expects Q2 revenues and core profit to come in roughly the same as Q1 as a result of weaker than expected drilling activity in Saudi Arabia and Latin America. During the quarter there has also been the disruption caused by the Middle East conflict between Israel and Iran.
Investors will be keen to see the group’s digital revenue, which grew by 17% year on year in the first quarter. This was driven by increased adoption of digital and AI solutions. Its data center infrastructure solutions business also saw strong growth in North America.
Also expect some commentary on SLB’s recent acquisition of chemical solutions and services ChampionX (CHX).
Is SLB a Good Stock to Buy Now?
On TipRanks, SLB has a Strong Buy consensus based on 14 Buy and 2 Hold ratings. Its highest price target is $53. SLB stock’s consensus price target is $45.38, implying a 31.19% upside.
