: SLB stock drops after profit tops expectation but revenue comes up short, as reservoir performance missed

Shares of SLB SLB, formerly known as Schlumberger Ltd., dropped 2.5% in premarket trading Friday after the oil services company reported third-quarter profit that topped expectations but revenue that came up shy. Net income rose to $1.12 billion, or 78 cents a share, from $907 million, or 63 cents a share, in the year-ago period. Excluding nonrecurring items, adjusted earnings per share of 78 was above the FactSet consensus of 77 cents. Revenue grew 11.1% to $8.31 billion, just below the FactSet consensus of $8.32 billion. Among the company’s largest business segments, well construction revenue rose 11% to $3.43 billion to match the FactSet consensus and production systems revenue increased 10% to $2.37 billion to top expectations of $2.36 billion, while reservoir performance revenue climbed 15% to $1.68 billion but missed expectations of $1.71 billion. The company said the oil and gas industry’s growth cycle has shifted to the international and offshore markets, where SLB is “the clear leader,” and upstream spending is accelerating. SLB’s stock has gained 4.7% over the past three months through Thursday, while the Energy Select Sector SPDR ETF XLE has rallied 9.9% and the S&P 500 SPX has lost 5.7%.

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