Schlumberger Limited (NYSE:SLB) Q1 2018 Earnings Conference Call - Final Transcript

Apr 20, 2018 • 08:30 am ET


Schlumberger Limited (NYSE:SLB) Q1 2018 Earnings Conference Call - Final Transcript


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Ladies and gentlemen, thank you for standing by, and welcome to Schlumberger's Earnings Conference Call. At this time, all participants are in a listen only mode. Later, we will conduct a question-and-answer session. The instructions will be given at that time. (Operator Instructions) As a reminder, this conference is being recorded.

I'd now like to turn the conference over to our host, Vice President, Investor Relations, Mr. Simon Farrant. Please go ahead, sir.

Simon Farrant

Good morning. Good afternoon. Welcome to the Schlumberger Limited first quarter 2019 earnings call. Today's call is being hosted from Moscow, Russia following a Schlumberger Limited Board Meeting. Joining us on the call are Paal Kibsgaard, Chairman and Chief Executive Officer; Simon Ayat, Chief Financial Officer; and Patrick Schorn, Executive Vice President, New Ventures.

We will, as usual, first go through our prepared remarks, after which we'll open for questions. For today's agenda, Simon will first present comments on our first quarter financial performance before Patrick reviews our results by geography. Paal will close our remarks with a discussion about technology portfolios and our updated view of the industry macro.

However, before we begin, I'd like to remind the participants that some of the statements we'll be making today are forward-looking. These matters involve risks and uncertainties that could cause our results to differ materially from those projected in these statements. I, therefore, refer you to our latest 10-K filing and other SEC filings. Our comments today may also include non-GAAP financial measures, additional details and reconciliations for the most directly comparable GAAP financial measures can be found in our first quarter press release, which is on our website.

Now, I'll hand the call over to Simon Ayat.

Simon Ayat

Thank you, Simon. Ladies and gentlemen, thank you for participating in this conference call. First quarter earnings per share, excluding charges and credits, was $0.38. This represents a decrease of $0.10 sequentially and an increase of $0.13 when compared to the same quarter last year. Our first quarter revenue of $7.8 billion, decreased 4% sequentially, largely driven by seasonal declines. Pretax operating margin decreased by 169 basis points to 12%.

Highlights by product group were as follows. First quarter reservoir characterization revenue of $1.6 billion, decreased 5% sequentially, primarily due to a seasonal decline in Wireline activities and lower SIS software and multi-client license sales following the usual, but muted, impact of year end. Margins decreased 224 basis points to 19.7%, driven by the lower contribution from Wireline and SIS software sales.

Drilling Group revenue of $2.1 billion, decreased 2% sequentially, while margins decreased 85 basis points to 13.8%. The strong activity in North America was more than offset by seasonal lower drilling activity in the international areas. Production Group revenue of $3 billion decreased 4% sequentially and margins fell by 291 basis points to 7.3%. These results were primarily driven by lower activity in the international markets and transient headwinds that impacted the North America hydraulic fracturing market.

Cameron Group revenue of $1.3 billion, decreased 7% sequentially. This decrease