Schlumberger shares close lower on Friday, fourth-quarter earnings top estimates as oil price surge supports drilling demand

Schlumberger NV (SLB), a leading oilfield services company, reported upbeat fourth-quarter results on Friday, as higher prices of crude oil and natural gas underpinned demand for drilling equipment and services.

“Absent any further COVID-related disruption, oil demand is expected to exceed pre-pandemic levels before the end of the year and to further strengthen in 2023,” Schlumberger’s Chief Executive Officer Olivier Le Peuch was quoted as saying by Reuters.

Vaccine-driven demand recovery and tight supply have pushed oil prices to highs unseen since October 2014.

Schlumberger’s adjusted net income surged to $587 million ($0.41 per share) during the fourth quarter, while outstripping a consensus of analyst estimates of $0.39 per share.

The company’s revenue was reported at $6.23 billion during the quarter, a figure that also exceeded the median analyst estimate ($6.09 billion).

Meanwhile, Baker Hughes data showed that Schlumberger’s global rig count was 1,563 at the end of the fourth quarter, up from 1,104 at the end of 2020.

Schlumberger shares closed lower for a fourth consecutive trading session in New York on Friday. The stock went down 1.86% ($0.69) to $36.36, after touching an intraday low at $35.68. The latter has been a price level not seen since January 11th ($35.23).

Shares of Schlumberger NV have risen 21.40% so far in 2022 compared with a 7.73% loss for the benchmark index, S&P 500 (SPX).

In 2021, Schlumberger NV’s stock went up 37.20%, thus, it again outperformed the S&P 500, which registered a 26.89% gain.

Analyst stock price forecast and recommendation

According to TipRanks, at least 7 out of 8 surveyed investment analysts had rated Schlumberger NV’s stock as “Buy”, while 1 – as “Hold”. The median price target on the stock stands at $41.57.