Schlumbergers Moment Of Truth – US-FOREX.US
Schlumberger’s managers will have to prove their tenacity on Friday to be able to navigate through tighter margins, fewer operations, and a dim outlook for oil prices.Since the beginning of the year Schlumberger
‘s stock has grown 36.1%. Even so, Wall Street analysts expect the firm’s second quarter earnings to be about half of the 1.16 per share it recorded last year, instead reaching 63 cents.The drop is understandable. A year ago oil flirted with 150-per-barrel prices, but since then oil and natural-gas producers cut operations as the market tumbled. The industry has mounted something of a comeback over the past seven months though. The Energy Select Sector SPDR
exchange-traded fund has risen 6.1% in 2009, while peers like Halliburton
and BJ Services
have risen 26.6%, and 28.3%, respectively.Like Halliburton, which reported earlier this week, slowed drilling activity has forced Schlumberger to contend with tight margins and lower rigs. By the end of the second quarter, Schlumberger’s peer’s profit tumbled, mostly due to the drop in natural-gas production in North America. Investors were left discouraged though when Halliburton offered only muted hope for an increase in drilling by the end of the year.