SLB misses on Q1 earnings, reports weaker-than-expected cash flow

Yahoo Finance Live anchors Julie Hyman and Brad Smith discuss the rise in stock for SLB despite missing on first-quarter earnings.

Video transcript

JULIE HYMAN: The artist formerly known as Schlumberger is out with numbers as well. Apparently it formerly has changed his name now to SLB, which is the same as its ticker. The shares aren't moving much this morning, even though the company beat on the top and bottom line. It did report weaker than expected cash flow and also noted its North American onshore market could see activity plateau this year, which is interesting. This was its best first quarter profit in eight years as it saw an increase in its fee revenue, which is interesting.

BRAD SMITH: Yeah, the CEO, Olivier Le Peuch, I believe I pronounce that correctly, sorry if I did not. But the quarter was defined by strong activity dynamics offshore. And then in the broader international basins, most notably in well construction and production systems.

So those are some of the catalysts for the quarter. There you're taking a look at the cash flow from operations coming in at $330 million. And then additionally here the net income attributable to SLB of $934 million, that increased 83% year over year. So some really strong catalysts driving that increase in net income in this most recent quarter as well.

JULIE HYMAN: Yeah. And this is something that we've seen for a lot of these different oilfield services companies, right, that we have seen strength there. It is interesting that commentary about how we might see activity plateau there. And then I think that's something that perhaps investors are going to be paying more attention to. The stock's actually a little bit lower this year after we saw a big increase in a lot of the energy stocks last year. Energy this year has been an under-performer.

And it looks like in this particular report that analyst coverage and analyst commentary, I should say, is focused on that cash flow number and saying that number was disappointing. Cowan saying free cash flow was, quote, "weak and below consensus" but that's not unusual for the first quarter. So that's something that people are looking at. And it looks like that the longer-term outlook seems to be relatively positive, that comment about the plateauing notwithstanding.

BRAD SMITH: So this is the last time we get to say Schlumberger is what you're telling me.

JULIE HYMAN: No, we can--

BRAD SMITH: We can still say it? All right. Cool. All right. They'd like to say SLB, but I guess--

JULIE HYMAN: We can say both.

BRAD SMITH: We're saying both. Schlumberger.

JULIE HYMAN: We still say Meta and Facebook.

BRAD SMITH: We do. We do. I still say Google as well.

JULIE HYMAN: As do we all.