Summary
- Schlumberger revealed another quarter without sales growth.
- Rebounding international capex has been offset by slowing production growth in the US.
- The market continues to be extremely challenging, and traders are not yet buying the international recovery.
Covering Schlumberger (SLB) is one of my favorite things to do as the company is one of the world's largest providers of oil drilling and production support services and equipment. The company reveals a lot of valuable insights every quarter, which helps to get a better understanding of the (international) oil market and the direction of oil related stock prices. Most recent quarterly data and comments are sending mixed signals as the company is experiencing an international upswing while US shale enters a very difficult stage. All things considered, Schlumberger's stock price is close to breaking down and more pain could be ahead before things get better.
Source: Schlumberger
The Situation Is Getting Slightly Better
Yes, the situation is getting slightly better for Schlumberger. Unfortunately, investors are not benefiting as the stock is on the edge of a breakdown. The stock is about to break below key support after reaching 2009 bottom prices in the first weeks of this year. Nothing so far has supported the stock. Higher oil prices, strong historical capex investments in US shale, and the most recent indication that international capex is starting to rebound.
Source: TradingView
In this article, I will discuss Schlumberger's situation based on its most recent second quarter data, comments, and data from external sources.
Starting with what I consider to be one of the most important numbers (sales), there is some good news as we are witnessing one of the most important secular trends for oil equipment and services providers.
