EARNINGS PREVIEW: US Oilfield Cos Hurt By Weak North Amer Operations
October 09 2009 - 1:05PM
Dow Jones News
TAKING THE PULSE: Natural-gas woes in North America likely will
weigh on oilfield-services companies' third-quarter results, as
prices struggle after hitting a 7 1/2-year low in September.
International markets, with a bigger oil focus, haven't skidded as
far. Though rig counts have edged up amid recent optimism about
prices recovering, they are far off last year's peak. Meanwhile,
Baker Hughes Inc. (BHI)'s impending $6 billion takeover of BJ
Services Co. (BJS) has the potential to help it challenge
international giants Halliburton Co. (HAL) and Schlumberger Ltd.
(SLB).
COMPANIES TO WATCH:
Halliburton Co. (HAL) - reports Oct. 16
Wall Street Expectations: Analysts polled by Thomson Reuters
project earnings of 26 cents a share on revenue of $3.42 billion. A
year earlier, Halliburton reported a 2-cent loss on debt-retirement
costs and other items while revenue was $4.85 billion.
Key Issues: Halliburton has been winning contracts in Mexico and
Brazil, but it remains unclear whether international growth can
offset natural gas declines in the U.S. The company, more exposed
to North America than its rivals, has expected major customers to
continue seeking discounts.
Weatherford International Ltd. (WFT) - reports Oct. 19
Wall Street Expectations: Analysts are looking for earnings of
13 cents on revenue of $2.16 billion, down from 53 cents and $2.54
billion, respectively.
Key Issues: The company continues to seek growth in Mexico and
gained a foothold in Russia with its $490 million acquisition of
the oilfield unit of BP PLC's (BP) Russian joint venture.
Weatherford, like Schlumberger, gets only about 30% of its revenue
from North America.
Nabors Industries Ltd. (NBR) - reports Oct. 20
Wall Street Expectations: The company is projected to post a
profit of 17 cents on revenue of $821 million, sharply lower than
the prior year's 73 cents and $1.41 billion.
Key Issues: North America's largest land-drilling contractor
needed to rely on its international business, as well as smaller
Alaskan and U.S. offshore businesses, in the latest quarter. While
lower-48 land drilling appeared to have stabilized, the company
projected in July that the segment's third-quarter profit could
fall another 50%.
Schlumberger Ltd. (SLB) - reports Oct. 23
Wall Street Expectations: Analysts forecast a profit of 63 cents
on revenue of $5.5 billion. A year earlier, the company reported
earnings of $1.25 a share and revenue of $7.26 billion.
Key Issues: While North American operations may have seen their
worst declines already, in July Schlumberger executives predicted
things wouldn't get much better this year. Chief Executive Andrew
Gould said at the time that oil prices would need to remain about
$70 a barrel toward year's end to sustain any revival in global
exploration and development.
Baker Hughes Inc. (BHI) - reports Nov. 4
Wall Street Expectations: The company is seen posting a profit
of 36 cents a share on revenue of $2.27 billion, down from $1.39
and $3 billion, respectively.
Key Issues: Baker Hughes will have an expanded repertoire of
services after its anticipated acquisition of BJ Services, whose
main business is pressure pumping, or sending chemicals down oil
and gas wells to improve production. (The deal is expected to close
by the end of the year.) Weakness in North America is likely to
continue to hurt results, while international markets have been
better.
(The Thomson Reuters estimate and year-earlier earnings may not
be comparable due to one-time items and other adjustments.)
-By Tess Stynes, Dow Jones Newswires; 212-416-2481;
tess.stynes@dowjones.com