Schlumberger Announces Second-Quarter 2022 Results and Raises Full-Year Outlook
Schlumberger Limited (NYSE: SLB) reported second-quarter 2022 revenue of $6.8 billion, a 14% sequential increase and 20% year-on-year growth. GAAP EPS rose 86% sequentially to $0.67, while EPS excluding charges increased 47% to $0.50. The company generated $408 million in cash flow from operations and announced a quarterly dividend of $0.175 per share. Schlumberger raised its full-year revenue outlook to at least $27 billion, reflecting a positive inflection point in growth and strong international performance.
- Revenue increased by 14% sequentially and 20% year-on-year.
- GAAP EPS rose 86% sequentially and 123% year-on-year.
- Adjusted EBITDA margin increased by 200 bps compared to the previous year.
- Full-year revenue outlook revised upward to at least $27 billion.
- None.
-
Revenue of
increased$6.8 billion 14% sequentially and20% year on year -
GAAP EPS of
increased$0.67 86% sequentially and123% year on year -
EPS, excluding charges and credits, of
increased$0.50 47% sequentially and67% year on year -
Cash flow from operations was
$408 million -
Board approved quarterly cash dividend of
per share$0.17 5 -
Full-year revenue outlook revised upward to at least
$27 billion
Second-Quarter Results | (Stated in millions, except per share amounts) | ||||||||
Three Months Ended | Change | ||||||||
Sequential | Year-on-year | ||||||||
Revenue |
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Income before taxes - GAAP basis |
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Net income - GAAP basis |
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Diluted EPS - GAAP basis |
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Adjusted EBITDA* |
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Adjusted EBITDA margin* |
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157 bps |
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132 bps |
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Pretax segment operating income* |
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Pretax segment operating margin* |
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212 bps |
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279 bps |
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Net income, excluding charges & credits* |
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Diluted EPS, excluding charges & credits* |
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Revenue by Geography |
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International |
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1,537 |
1,282 |
1,083 |
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Other | 48 |
48 |
40 |
n/m |
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n/m |
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*These are non-GAAP financial measures. See sections titled "Charges & Credits", "Divisions", and "Supplemental Information" for details. | |||
n/m = not meaningful |
(Stated in millions) | |||||||||
Three Months Ended | Change | ||||||||
Sequential | Year-on-year | ||||||||
Revenue by Division | |||||||||
Digital & Integration |
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Reservoir Performance | 1,333 |
1,210 |
1,117 |
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2,686 |
2,398 |
2,110 |
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Production Systems | 1,893 |
1,604 |
1,681 |
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Other | (94) |
(107) |
(91) |
n/m |
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n/m |
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Pretax Operating Income by Division |
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Digital & Integration |
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Reservoir Performance | 195 |
160 |
156 |
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470 |
388 |
272 |
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Production Systems | 171 |
114 |
171 |
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Other | (56) |
(60) |
(66) |
n/m |
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n/m |
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Pretax Operating Margin by Division |
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Digital & Integration |
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570 bps |
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621 bps |
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Reservoir Performance |
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143 bps |
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69 bps |
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134 bps |
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462 bps |
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Production Systems |
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190 bps |
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-114 bps |
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Other | n/m |
n/m |
n/m |
n/m |
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n/m |
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212 bps |
279 bps |
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n/m = not meaningful |
Schlumberger CEO
“On a year-over-year basis, revenue grew
Raising Full-Year Outlook
“The strength of our second-quarter outperformance highlights a firmly established growth inflection and our ability to comprehensively participate in drilling and completion activity growth globally. The multiyear upcycle continues to gain momentum with upstream activity and service pricing steadily increasing both internationally and in
“As a result of this performance and based on our updated outlook for the remainder of the year, 2022 year-on-year revenue growth is now expected to be in the high-teens which translates to full-year revenue of at least
Second-Quarter Growth Broad-Based Across All Geographies
Second-quarter sequential revenue growth was broad-based, with international revenue increasing
Power of the Core—Complemented by Digital
Le Peuch said, “These results demonstrate the power of Schlumberger’s Core, which is performing exceedingly well and benefitting from the effects of improved operating leverage, favorable offshore activity mix, greater technology adoption, and an improving global service pricing environment.”
Sequentially, all Divisions posted double-digit revenue growth—outpacing rig count growth both in
Overall, second-quarter pretax segment operating income increased
Second-quarter cash from operations was
A Strengthened Outlook Aligned to Schlumberger’s Strengths
Le Peuch said, “Looking ahead, the second half of the year continues to shape up very well as highlighted in our revised expectations for the full year, encompassing all phases of oil and gas development and all operating environments—from high-volume onshore to deepwater offshore—and firmly establishing digital, decarbonization, and improved pricing as defining characteristics of this upcycle.
“Despite near-term concerns over a global economic slowdown, the combination of energy security, favorable break-even prices, and the urgency to grow oil and gas production capacity is expected to continue to support strong upstream E&P spending growth. Consequently, we are witnessing a decoupling of upstream spending from near-term demand volatility, resulting in resilient global oil and gas activity growth in 2022 and beyond.
“Our second-quarter results were a great demonstration of our revenue, operating margins, and earnings growth potential. I am very pleased with our execution thus far in the year and extend my appreciation to our team for delivering an exceptional quarter.”
Other Events
On
Revenue by Geographical Area
(Stated in millions) | |||||||||
Three Months Ended | Change | ||||||||
Sequential | Year-on-year | ||||||||
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1,329 |
1,204 |
1,057 |
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1,691 |
1,404 |
1,453 |
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2,168 |
2,024 |
2,001 |
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Eliminations & other | 48 |
48 |
40 |
n/m |
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n/m |
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International |
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n/m = not meaningful |
International
Revenue in
Year on year, revenue grew
Year on year, revenue grew
Revenue in the
Year on year, revenue increased
Compared to the same quarter last year,
Second-Quarter Results by Division
Digital & Integration
(Stated in millions) | |||||||||
Three Months Ended | Change | ||||||||
Sequential | Year-on-year | ||||||||
Revenue | |||||||||
International |
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- |
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327 |
225 |
191 |
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Other | 1 |
1 |
1 |
n/m |
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n/m |
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Pretax operating income |
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Pretax operating margin |
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570 bps |
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621 bps |
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n/m = not meaningful |
Digital & Integration revenue of
Digital & Integration pretax operating margin of
Reservoir Performance
(Stated in millions) | |||||||||
Three Months Ended | Change | ||||||||
Sequential | Year-on-year | ||||||||
Revenue | |||||||||
International |
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111 |
103 |
79 |
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Other | - |
2 |
- |
n/m |
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n/m |
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Pretax operating income |
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Pretax operating margin |
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143 bps |
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69 bps |
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n/m = not meaningful |
Reservoir Performance revenue of
Year on year, revenue growth was broad across all regions and GeoUnits, except for
Reservoir Performance pretax operating margin of
Year on year, pretax operating margin expanded 69 bps with profitability improving both in evaluation and intervention and geographically in
(Stated in millions) | |||||||||
Three Months Ended | Change | ||||||||
Sequential | Year-on-year | ||||||||
Revenue | |||||||||
International |
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553 |
485 |
352 |
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Other | 50 |
48 |
50 |
n/m |
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n/m |
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Pretax operating income |
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Pretax operating margin |
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134 bps |
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462 bps |
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n/m = not meaningful |
Year on year, revenue growth of
Year on year, pretax operating margin expanded 462 bps with profitability improving across most regions, driven by higher activity and improved pricing.
Production Systems
(Stated in millions) | |||||||||
Three Months Ended | Change | ||||||||
Sequential | Year-on-year | ||||||||
Revenue | |||||||||
International |
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550 |
473 |
458 |
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Other | 2 |
4 |
3 |
n/m |
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n/m |
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Pretax operating income |
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Pretax operating margin |
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190 bps |
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-114 bps |
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n/m = not meaningful |
Production Systems revenue of
Year on year, double-digit growth was driven by new projects and increased product deliveries mainly in
Production Systems pretax operating margin of
Year on year, pretax operating margin contracted 114 bps due to higher logistics costs and unfavorable revenue mix.
Quarterly Highlights
Schlumberger continues to secure a pipeline of new contract awards as customers announce new projects and with the expansion of existing developments globally. Schlumberger is increasingly being selected for its superior performance and execution and its innovative technology that enhances customer success. Examples of awards from the quarter include the following:
-
In
Norway , Aker BP ASA has awarded a frame agreement to Cameron, a Schlumberger company, for surface wellheads and production trees for up to 64 wells on the North of Alvheim,King Lear , and Valhall New Central Platform projects in the Norwegian sector of theNorth Sea . The ten-year agreement contains optional extensions for the life of the field and covers engineering, qualification, and manufacture of digitalized wellhead equipment and production trees capable of up to 15,000-psi operation and condition-based monitoring, as well as a new 21-in metal-to-metal Fontus* configurable production wellhead system. Installation is scheduled to begin in 2024.
-
In
Brazil , Petrobras awarded Schlumberger a contract for integrated intelligent completions for wells in the presalt area. The advanced completion design selected for these wells includes premium interval flow control valves, an inductive coupling downhole wet disconnect tool and a wireless real-time running tool, GeoGuard* high-performance deepwater safety valves, and Metris* permanent monitoring systems. This intelligent completion technology package will enable Petrobras to more accurately monitor and control production—enhancing ultimate recovery. This contract, for which work is expected to commence in the first quarter of 2023, is a precursor to the development of an all-electric completion, currently underway inBrazil at the Schlumberger Taubaté Engineering Center.
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OneSubsea®, the subsea technologies, production, and processing systems business of Schlumberger, has been awarded an engineering, procurement, construction, and installation (EPCI) contract by OKEA for the supply of three subsea high-boost pumps to increase production from the Draugen Field, located in the southern part of the
Norwegian Sea . Under the contract, which is part of a frame agreement signed in 2017 by OKEA andSubsea Integration Alliance , OneSubsea will deliver a new high-boost pump module and modify two existing pump modules into high-boost pumps capable of handling higher differential pressure and throughput to maximize production from this asset. Delivery of the pump modules is scheduled for 2023.
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Sarawak Shell Berhad has awarded Schlumberger a contract for integrated drilling services on seven exploration wells offshoreMalaysia . The scope of the contract includes drilling and measurement, electrical wireline, drilling fluids, solids control, cementing, casing drilling, bits, and mud logging. Schlumberger will apply a variety of technologies, including the Allegro CD* directional casing-while-drilling service with the sonicVISION* sonic-while-drilling service to enhance performance of this operation, which commenced during the second quarter of 2022.
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Equinor has made a direct award to Schlumberger for downhole completion and artificial lift equipment to extend the life of the Statfjord Field in the
North Sea . Supporting Equinor's dual objective of increasing recovery from the field while significantly reducing thecarbon intensity of incremental production, the award includes a Shuttle* rigless electric submersible pump (ESP) using a REDA* pump powered through a completion-integrated downhole wet-mate docking station. Because an ESP can more completely drain the reservoir using less electricity per barrel than compressor-driven gas lift, this solution will increase annual production and lowercarbon intensity. Installation of the completions using the Shuttle rigless ESP technology is expected to commence in the first quarter of 2023.
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Chariot, the African-focused transitional energy company, has signed a front-end engineering and design (FEED) contract with Schlumberger and Subsea 7, as part of a consortium, for the Anchois gas development project offshore
Morocco . The scope of the agreement incorporates offshore components including well completions; subsea production systems; and subsea umbilicals, risers, and flowlines (SURF) that will be delivered bySubsea Integration Alliance . Onshore components include a central processing facility (CPF) and flowlines and controls from the CPF to the shore crossing that will be delivered by Schlumberger.
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Talos Energy has awarded Schlumberger contracts for well construction services including drilling fluids, directional drilling, bits and reamers, and logging while drilling in the deepwaterGulf of Mexico . This adds to previous awards on ongoing Talos projects, including developmental drilling from the Pompano platform on the Continental Shelf. The new awards include technologies that will deliver demanding 3D directional drilling profiles and high-quality data with superior logging-while-drilling technology. Talos is scheduled to deploy a semisubmersible rig inAugust 2022 for this multiwell, deepwater campaign—the latest project in a collaboration between the two companies that has developed over years to deliver best-in-class wells.
-
The
Abu Dhabi National Oil Company (ADNOC) has awarded Schlumberger a five-year wireline services contract. The contract, which includes an optional two-year extension, covers open- and cased-hole wireline logging, as well as perforating and coiled tubing logging services. Schlumberger technologies, including the Pulsar* multifunction spectroscopy service and Saturn* 3D radial probe, will be deployed to maximize the production of existing wells and appraise new fields for production expansion. Work is expected to commence in the third quarter of 2022.
Digital adoption across the industry continues to gather momentum, expanding how customers access their data, improve existing or create new workflows, and use data to guide decisions that boost performance in the field. Customers are adopting our industry-leading digital platform and edge solutions in the field to solve new challenges and improve operational performance. Examples from the quarter include the following:
-
Offshore
Brazil , Schlumberger’s autonomous operations on the Peregrino platform offer a glimpse into the future of well construction—built on a digitally native foundation and unique equipment and service integration capabilities. In addition to the delivery of the full drilling and control systems on the platform, Schlumberger developed a digital avatar of the rig, fully enabling the seamless digital orchestration of the surface equipment and subsurface well construction process—a step closer to the autonomous drilling vision. -
In
Malaysia ,PETRONAS has awarded Schlumberger a contract to incorporate the DrillOps* on-target well delivery solution in a drilling campaign in theWest Malaysia offshore, the first deployment of this digital application inAsia . Drilling has already commenced, with the DrillOps solution expected to deliver superior drilling performance, safety, and efficiency forPETRONAS . This deployment builds on digital partnerships initiated between Schlumberger andPETRONAS to accelerate its field development planning and optimize asset production performance. -
In
Ecuador , Schlumberger deployed a digital water injection solution—built on Agora* edge AI and IoT solutions—that is increasing production for PetroEcuador in the Shushufindi Field. The system integrates smart hardware and Agora solutions to generate continuous real-time surveillance, smart notifications, and local control loops for water injection. Leveraging AI deployed at the edge, the system has predicted early water injection pump failures and consequently avoided reduced oil production stemming from limited water handling capacity. This digital solution has avoided 12,000 bbl of production losses, corrective maintenance cost, and 100 labor hours that would have otherwise reduced project performance. The customer expects to expand the deployment of this Agora solution to other injection systems across the field.
Schlumberger continues to introduce new technologies that boost customer efficiency and improve operational performance. Among the new technologies deployed were solutions from the Transition Technologies* portfolio that delivered significant emissions reduction.
-
In
East Texas , Schlumberger delivered the fastest one-mile curve-and-lateral production hole in KJ Energy history in the challenging Cotton Valley Formation. The fit-for-basin bottomhole assembly (BHA) comprising only Schlumberger technology—including PowerDrive Orbit G2* rotary steerable system, xBolt G2* accelerated drilling service, and AxeBlade* ridged diamond element bit—remotely drilled the 6.75-in curve and lateral in 10.6 days with Performance Live* digitally connected service. This performance helped the customer beat its average performance by28% and its previous well record by 24 hours.
-
Offshore
Brazil , Schlumberger’s recent application of technology and an integrated drilling contract model has enabled Petrobras to drill two of its fastest wells on record, including the most recent national record of 23 days—7 days ahead of plan. The adoption of an integrated approach enabled Petrobras’ bold drilling plan that was executed with fit-for-purpose technology, including GeoSphere HD* high-definition reservoir mapping-while-drilling service, and AxeBlade ridged diamond element bit. This marked the first use of geometric cutters in the Marlim Field and contributed to operational success. With the recent record-breaking performances,Schlumberger Well Construction has now drilled the three fastest wells offshoreBrazil .
-
Offshore
East Java , Schlumberger enabledSaka Indonesia Pangkah Limited (SIPL) to bring two plugged exploration wells into production, avoiding the need to drill new wells and shortening time to first gas. This was the first conversion of an offshore exploration well to a producing well where the casing had been cut at the seabed. To achieve this, Schlumberger used a novel application of its Casing Reconnect* metal-to-metal, gas-tight casing repair system for reentry and completion.
-
Schlumberger is deploying a new technology that can increase the efficiency of rigless plugging and abandonment (P&A) of wells, delivering a step change in the P&A process for the industry. The Schlumberger dual-string P&A barrier evaluation technology was run for the first time in the
Gulf of Mexico to evaluate cement bonding in the annulus between the 13 3/8-in and 16-in casing with the logging tool run inside uncemented 9 5/8-in production casing. The technique documented sufficient cement bonding to allow theBureau of Safety and Environmental Enforcement to waive further remediation of that annulus. This saved W&T Offshore Inc. multiple days on the abandonment operation being performed by the Q4000 vessel, operated by Helix Energy Solutions Group, Inc., Schlumberger’s partner in the nonincorporatedSubsea Services Alliance .
Our industry must advance sustainability in its operations by reducing environmental impact while contributing to the stability of the global energy supply. Schlumberger continues to create and apply technology to both reduce emissions from customer operations and support clean energy generation around the world.
-
Zorlu Enerji, Turkey’s leading geothermal investor, installed the country’s first REDA Thermal* power-efficient geothermal electric submersible pump (ESP) to increase zero-
carbon electricity generation at its Kızıldere geothermal power facility. The REDA Thermal pump uses ESP permanent magnet motor technology, one of Schlumberger's Transition Technologies, to reduce the parasitic load needed to operate the ESP—increasing net generated power. REDA Thermal pumps are designed specifically for the geothermal industry, combining innovation that overcomes oil and gas production challenges with materials that meet the operational and longevity requirements of geothermal wells. This technology was developed leveraging industry domain expertise from GeothermEx, a Schlumberger multidisciplinary geothermal consulting and services company.
Schlumberger continues to advance its portfolio of new energy ventures in Schlumberger New Energy, where it is applying domain expertise and technology industrialization capabilities to growing new energy markets.
-
Celsius Energy, a Schlumberger New Energy business venture focused on heating and cooling solutions for buildings, commenced installation of its novel geoenergy solution for Groupement Optic 2000, a leading French eyewear brand, at its headquarters in
Clamart, France . The facility comprises 12,000 m2 of offices and a workshop in which glasses are manufactured from recycled materials. In line with Groupement Optic 2000’s commitment to sustainable development, the Celsius system was selected for its capability to reduce both CO2 emissions and energy costs, and it is expected to decrease the location’s CO2 footprint by70% and its energy consumption by40% . This installation is one of five projects ongoing inEurope for Celsius Energy and is expected to be operational in the fourth quarter of 2022.
FINANCIAL TABLES
Condensed Consolidated Statement of Income | |||||||||
(Stated in millions, except per share amounts) |
|||||||||
Second Quarter | Six Months | ||||||||
Periods Ended |
2022 |
2021 |
2022 |
2021 |
|||||
Revenue |
|
|
|
|
|||||
Interest & other income (1) | 311 |
16 |
361 |
35 |
|||||
Expenses | |||||||||
Cost of revenue | 5,568 |
4,768 |
10,581 |
9,274 |
|||||
Research & engineering | 154 |
134 |
295 |
268 |
|||||
General & administrative | 86 |
70 |
183 |
150 |
|||||
Interest | 124 |
136 |
247 |
272 |
|||||
Income before taxes (1) |
|
|
|
|
|||||
Tax expense (1) | 182 |
99 |
300 |
173 |
|||||
Net income (1) |
|
|
|
|
|||||
Net income attributable to noncontrolling interest | 11 |
12 |
21 |
25 |
|||||
Net income attributable to Schlumberger (1) |
|
|
|
|
|||||
Diluted earnings per share of Schlumberger (1) |
|
|
|
|
|||||
Average shares outstanding | 1,414 |
1,398 |
1,413 |
1,398 |
|||||
Average shares outstanding assuming dilution | 1,436 |
1,421 |
1,435 |
1,420 |
|||||
Depreciation & amortization included in expenses (2) |
|
|
|
|
(1) |
See section entitled “Charges & Credits” for details. |
(2) |
Includes depreciation of property, plant and equipment and amortization of intangible assets, exploration data costs, and APS investments. |
Condensed Consolidated Balance Sheet
(Stated in millions) | |||
|
|
||
Assets | 2022 |
2021 |
|
Current Assets | |||
Cash and short-term investments |
|
|
|
Receivables | 6,247 |
5,315 |
|
Inventories | 3,968 |
3,272 |
|
Other current assets | 1,285 |
928 |
|
14,316 |
12,654 |
||
Investment in affiliated companies | 1,767 |
2,044 |
|
Fixed assets | 6,386 |
6,429 |
|
13,009 |
12,990 |
||
Intangible assets | 3,102 |
3,211 |
|
Other assets | 4,247 |
4,183 |
|
|
|
||
Liabilities and Equity | |||
Current Liabilities | |||
Accounts payable and accrued liabilities |
|
|
|
Estimated liability for taxes on income | 884 |
879 |
|
Short-term borrowings and current portion | |||
of long-term debt | 901 |
909 |
|
Dividends payable | 270 |
189 |
|
10,583 |
10,359 |
||
Long-term debt | 12,946 |
13,286 |
|
Postretirement benefits | 232 |
231 |
|
Other liabilities | 2,441 |
2,349 |
|
26,202 |
26,225 |
||
Equity | 16,625 |
15,286 |
|
|
|
Liquidity
(Stated in millions) | |||||||
Components of Liquidity | |||||||
Cash and short-term investments |
|
|
|
|
|||
Short-term borrowings and current portion of long-term debt | (901) |
(923) |
(36) |
(909) |
|||
Long-term debt | (12,946) |
(13,163) |
(15,687) |
(13,286) |
|||
Net Debt (1) |
|
|
|
|
|||
Details of changes in liquidity follow: | |||||||
Six |
Second |
Six |
|||||
Months |
Quarter |
Months |
|||||
Periods Ended |
2022 |
2022 |
2021 |
||||
Net income |
|
|
|
||||
Charges and credits, net of tax (2) | (266) |
(244) |
- |
||||
1,224 |
726 |
755 |
|||||
Depreciation and amortization (3) | 1,065 |
532 |
1,058 |
||||
Stock-based compensation expense | 160 |
71 |
156 |
||||
Change in working capital | (1,884) |
(936) |
(758) |
||||
US federal tax refund | - |
- |
477 |
||||
Other | (26) |
15 |
(39) |
||||
Cash flow from operations (4) | 539 |
408 |
1,649 |
||||
Capital expenditures | (664) |
(360) |
(421) |
||||
APS investments | (311) |
(143) |
(188) |
||||
Exploration data capitalized | (64) |
(24) |
(12) |
||||
Free cash flow (5) | (500) |
(119) |
1,028 |
||||
Dividends paid | (352) |
(177) |
(349) |
||||
Proceeds from employee stock plans | 93 |
22 |
62 |
||||
Business acquisitions and investments, net of cash acquired plus debt assumed | (8) |
(8) |
(35) |
||||
Proceeds from sale of Liberty shares | 513 |
429 |
- |
||||
Proceeds from sale of real estate | 120 |
120 |
- |
||||
Other | (171) |
(66) |
(30) |
||||
Change in net debt before impact of changes in foreign exchange rates | (305) |
201 |
676 |
||||
Impact of changes in foreign exchange rates on net debt | 330 |
205 |
163 |
||||
Decrease in Net Debt | 25 |
406 |
839 |
||||
Net Debt, beginning of period | (11,056) |
(11,437) |
(13,880) |
||||
Net Debt, end of period |
|
|
|
|
|
(1) |
“Net Debt” represents gross debt less cash and short-term investments. Management believes that Net Debt provides useful information regarding the level of Schlumberger’s indebtedness by reflecting cash and investments that could be used to repay debt. Net Debt is a non-GAAP financial measure that should be considered in addition to, not as a substitute for or superior to, total debt. |
(2) |
See section entitled “Charges & Credits” for details. |
(3) |
Includes depreciation of property, plant and equipment and amortization of intangible assets, exploration data costs, and APS investments. |
(4) |
Includes severance payments of |
(5) |
“Free cash flow” represents cash flow from operations less capital expenditures, APS investments, and exploration data costs capitalized. Management believes that free cash flow is an important liquidity measure for the company and that it is useful to investors and management as a measure of Schlumberger’s ability to generate cash. Once business needs and obligations are met, this cash can be used to reinvest in the company for future growth or to return to shareholders through dividend payments or share repurchases. Free cash flow does not represent the residual cash flow available for discretionary expenditures. Free cash flow is a non-GAAP financial measure that should be considered in addition to, not as a substitute for or superior to, cash flow from operations. |
Charges & Credits
In addition to financial results determined in accordance with US generally accepted accounting principles (GAAP), this second-quarter 2022 earnings release also includes non-GAAP financial measures (as defined under the SEC’s Regulation G). In addition to the non-GAAP financial measures discussed under “Liquidity”, net income, excluding charges & credits, as well as measures derived from it (including diluted EPS, excluding charges & credits; Schlumberger net income, excluding charges & credits; effective tax rate, excluding charges & credits; and adjusted EBITDA) are non-GAAP financial measures. Management believes that the exclusion of charges & credits from these financial measures enables it to evaluate more effectively Schlumberger’s operations period over period and to identify operating trends that could otherwise be masked by the excluded items. These measures are also used by management as performance measures in determining certain incentive compensation. The foregoing non-GAAP financial measures should be considered in addition to, not as a substitute for or superior to, other measures of financial performance prepared in accordance with GAAP. The following is a reconciliation of certain of these non-GAAP measures to the comparable GAAP measures. For a reconciliation of adjusted EBITDA to the comparable GAAP measure, please refer to the section titled “Supplemental Information” (Question 9).
(Stated in millions, except per share amounts) |
|||||
|
|||||
Second Quarter 2022 |
|||||
Pretax | Tax | Noncont. Interests | Net |
Diluted
|
|
Schlumberger net income (GAAP basis) |
|
|
|
|
|
Gain on sale of Liberty shares (1) | (216) |
(13) |
- |
(203) |
(0.14) |
Gain on sale of real estate (1) | (43) |
(2) |
- |
(41) |
(0.03) |
Schlumberger net income, excluding charges & credits |
|
|
|
|
|
|
|||||
Six Months 2022 |
|||||
Pretax | Tax | Noncont. Interests | Net |
Diluted
|
|
Schlumberger net income (GAAP basis) |
|
|
|
|
|
Gain on sale of Liberty shares (1) | (242) |
(17) |
- |
(225) |
(0.16) |
Gain on sale of real estate (1) | (43) |
(2) |
- |
(41) |
(0.03) |
Schlumberger net income, excluding charges & credits |
|
|
|
|
|
|
|||||
First Quarter 2022 |
|||||
Pretax | Tax | Noncont. Interests | Net |
Diluted
|
|
Schlumberger net income (GAAP basis) |
|
|
|
|
|
Gain on sale of Liberty shares (1) | (26) |
(4) |
- |
(22) |
(0.02) |
Schlumberger net income, excluding charges & credits |
|
|
|
|
|
There were no charges or credits during the first six months of 2021. |
* Does not add due to rounding. |
(1) Classified in Interest & other income in the Condensed Consolidated Statement of Income. |
Divisions
(Stated in millions) | |||||||||||
Three Months Ended | |||||||||||
Revenue | Income Before Taxes | Revenue | Income Before Taxes | Revenue | Income Before Taxes | ||||||
Digital & Integration |
|
|
|
|
|
|
|||||
Reservoir Performance | 1,333 |
195 |
1,210 |
160 |
1,117 |
156 |
|||||
2,686 |
470 |
2,398 |
388 |
2,110 |
272 |
||||||
Production Systems | 1,893 |
171 |
1,604 |
114 |
1,681 |
171 |
|||||
Eliminations & other | (94) |
(56) |
(107) |
(60) |
(91) |
(66) |
|||||
Pretax segment operating income | 1,159 |
894 |
807 |
||||||||
Corporate & other | (148) |
(164) |
(138) |
||||||||
Interest income(1) | 3 |
2 |
5 |
||||||||
Interest expense(1) | (121) |
(120) |
(132) |
||||||||
Charges & credits(2) | 259 |
26 |
- |
||||||||
|
|
|
|
|
|
(Stated in millions) | |||||||||||
Six Months Ended | |||||||||||
Revenue | Income Before Taxes | Revenue | Income Before Taxes | ||||||||
Digital & Integration |
|
|
|
|
|||||||
Reservoir Performance | 2,543 |
355 |
2,119 |
258 |
|||||||
5,083 |
858 |
4,045 |
482 |
||||||||
Production Systems | 3,497 |
285 |
3,271 |
309 |
|||||||
Eliminations & other | (201) |
(115) |
(168) |
(99) |
|||||||
Pretax segment operating income | 2,054 |
1,471 |
|||||||||
Corporate & other | (313) |
(288) |
|||||||||
Interest income(1) | 5 |
9 |
|||||||||
Interest expense(1) | (241) |
(264) |
|||||||||
Charges & credits(2) | 285 |
- |
|||||||||
|
|
|
|
(1) | Excludes amounts which are included in the segments’ results. |
(2) | See section entitled “Charges & Credits” for details. |
Supplementary Information
Frequently Asked Questions
1) |
What is the capital investment guidance for the full-year 2022? |
|||
|
Capital investment (composed of capex, exploration data costs, and APS investments) for the full-year 2022 is expected to be approximately |
|||
|
|
|
|
|
2) |
What were cash flow from operations and free cash flow for the second quarter of 2022? |
|||
|
Cash flow from operations for the second quarter of 2022 was |
|||
|
|
|
|
|
3) |
What was included in “Interest and other income” for the second quarter of 2022? |
|||
|
“Interest and other income” for the second quarter of 2022 was |
|||
|
|
|
|
|
4) |
How did interest income and interest expense change during the second quarter of 2022? |
|||
|
Interest income of |
|||
|
|
|
|
|
5) |
What is the difference between Schlumberger’s consolidated income before taxes and pretax segment operating income? |
|||
|
The difference consists of corporate items, charges and credits, and interest income and interest expense not allocated to the segments as well as stock-based compensation expense, amortization expense associated with certain intangible assets, certain centrally managed initiatives, and other nonoperating items. |
|||
|
|
|
|
|
6) |
What was the effective tax rate (ETR) for the second quarter of 2022? |
|||
|
The ETR for the second quarter of 2022, calculated in accordance with GAAP, was |
|||
|
|
|
|
|
7) |
How many shares of common stock were outstanding as of |
|||
|
There were 1.414 billion shares of common stock outstanding as of |
|||
|
|
(Stated in millions) |
|
|
|
Shares outstanding at |
1,413 |
|
|
|
Shares issued under employee stock purchase plan |
- |
|
|
|
Shares issued to optionees, less shares exchanged |
1 |
|
|
|
Vesting of restricted stock |
- |
|
|
|
Shares outstanding at |
1,414 |
|
|
|
|
|
|
|
8) |
What was the weighted average number of shares outstanding during the second quarter of 2022 and first quarter of 2022? How does this reconcile to the average number of shares outstanding, assuming dilution, used in the calculation of diluted earnings per share? |
|||
|
The weighted average number of shares outstanding was 1.414 billion during the second quarter of 2022 and 1.412 billion during the first quarter of 2022. The following is a reconciliation of the weighted average shares outstanding to the average number of shares outstanding, assuming dilution, used in the calculation of diluted earnings per share. |
|||
|
|
|
(Stated in millions) |
|
|
|
Second Quarter 2022 |
First Quarter 2022 |
|
|
Weighted average shares outstanding |
1,414 |
1,412 |
|
|
Unvested restricted stock |
22 |
22 |
|
|
Average shares outstanding, assuming dilution |
1,436 |
1,434 |
|
|
|
|
|
|
9) |
What was Schlumberger’s adjusted EBITDA in the second quarter of 2022, the first quarter of 2022, and the second quarter of 2021? |
|||
|
Schlumberger’s adjusted EBITDA was |
(Stated in millions) | |||||
Second Quarter 2022 | First Quarter 2022 | Second Quarter 2021 | |||
Net income attributable to Schlumberger |
|
|
|
||
Net income attributable to noncontrolling interests | 11 |
10 |
12 |
||
Tax expense | 182 |
118 |
99 |
||
Income before taxes |
|
|
|
||
Charges & credits | (259) |
(26) |
- |
||
Depreciation and amortization | 532 |
533 |
526 |
||
Interest expense | 124 |
123 |
136 |
||
Interest income | (19) |
(14) |
(6) |
||
Adjusted EBITDA |
|
|
|
Adjusted EBITDA represents income before taxes, excluding charges & credits, depreciation and amortization, interest expense, and interest income. Management believes that adjusted EBITDA is an important profitability measure for Schlumberger and that it allows investors and management to more efficiently evaluate Schlumberger’s operations period over period and to identify operating trends that could otherwise be masked. Adjusted EBITDA is also used by management as a performance measure in determining certain incentive compensation. Adjusted EBITDA should be considered in addition to, not as a substitute for or superior to, other measures of financial performance prepared in accordance with GAAP. |
||
|
||
10) |
What were the components of depreciation and amortization expense for the second quarter of 2022, the first quarter of 2022, and the second quarter of 2021? |
|
The components of depreciation and amortization expense for the second quarter of 2022, the first quarter of 2022, and the second quarter of 2021 were as follows: |
(Stated in millions) | |||||
Second Quarter 2022 | First Quarter 2022 | Second Quarter 2021 | |||
Depreciation of fixed assets |
|
|
|
||
Amortization of intangible assets | 75 |
75 |
75 |
||
Amortization of APS investments | 87 |
83 |
77 |
||
Amortization of exploration data costs capitalized | 30 |
37 |
22 |
||
|
|
|
11) |
What were the components of the pretax credit of |
|||
The components of the net pretax charges & credits are as follows (in millions): | ||||
Gain on sale of Liberty shares(a) |
|
|||
Gain on sale of real estate(b) |
43 |
|||
|
|
|||
(a) |
During the second quarter of 2022, Schlumberger sold 26.5 million of its shares in Liberty and received proceeds of |
|||
(b) |
During the second quarter of 2022, Schlumberger sold certain real estate and received proceeds of |
About Schlumberger
Schlumberger (SLB: NYSE) is a technology company that partners with customers to access energy. Our people, representing over 160 nationalities, are providing leading digital solutions and deploying innovative technologies to enable performance and sustainability for the global energy industry. With expertise in more than 120 countries, we collaborate to create technology that unlocks access to energy for the benefit of all.
Find out more at www.slb.com
*Mark of Schlumberger or a Schlumberger company. Other company, product, and service names are the properties of their respective owners.
Conference Call Information
Schlumberger will hold a conference call to discuss the earnings press release and business outlook on
This second-quarter 2022 earnings press release, as well as other statements we make, contain “forward-looking statements” within the meaning of the federal securities laws, which include any statements that are not historical facts. Such statements often contain words such as “expect,” “may,” “can,” “believe,” “predict,” “plan,” “potential,” “projected,” “projections,” “precursor,” “forecast,” “outlook,” “expectations,” “estimate,” “intend,” “anticipate,” “ambition,” “goal,” “target,” “scheduled,” “think,” “should,” “could,” “would,” “will,” “see,” “likely,” and other similar words. Forward-looking statements address matters that are, to varying degrees, uncertain, such as statements about our financial and performance targets and other forecasts or expectations regarding, or dependent on, our business outlook; growth for Schlumberger as a whole and for each of its Divisions (and for specified business lines, geographic areas, or technologies within each Division); oil and natural gas demand and production growth; oil and natural gas prices; forecasts or expectations regarding energy transition and global climate change; improvements in operating procedures and technology; capital expenditures by Schlumberger and the oil and gas industry; our business strategies, including digital and “fit for basin,” as well as the strategies of our customers; our effective tax rate; our APS projects, joint ventures, and other alliances; our response to the COVID-19 pandemic and our preparedness for other widespread health emergencies; the impact of the ongoing conflict in
View source version on businesswire.com: https://www.businesswire.com/news/home/20220720005947/en/
Investor Relations Contacts:
Office +1 (713) 375-3535
investor-relations@slb.com
Media Contacts:
Office +1 (713) 375-3407
media@slb.com
Source: Schlumberger
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