Schlumberger Limited. (NYSE:SLB) reported its latest quarterly earnings after the markets closed on Thursday, and its performance for the second quarter of 2015 exceeded expectations. The oil and gas exploration and production industry services firm revealed that it earned $0.89 per share on revenues of $9.01 billion, beating forecasts of $0.79 EPS on revenues of $8.97 billion. Revenue, however, declined sharply by 25% year-over-year, weighed down by pricing slumps and lesser activity in inland locations in North America, woes which were clearly anticipated by analysts. Schlumberger Limited. (NYSE:SLB) reported North America revenues decreased by 39% year-over-year and 27% quarter-over-quarter to $2.36 billion for the most recent quarter. International revenue declined by 19% versus the same period a year ago, and by 5% from the first quarter to $6.53 billion.
Schlumberger Chairman and CEO Paal Kibsgaard pointed out, however, that, “Despite the much more challenging market conditions, overall pretax operating margins were maintained at levels well above the previous downturns as we continued to proactively manage costs and resources, carefully navigate the commercial landscape, and further accelerate our transformation program. The success of our efforts can be seen in pretax operating margins of 10.2% in North America and 24.5% internationally while generating $1.5 billion in free cash flow, representing 132% of earnings.”
The declines experienced by Schlumberger Limited. (NYSE:SLB) despite the top line and bottom line beats were in-line with hedge fund sentiment in the first quarter. Hedge fund holdings in the company among those we track declined by 14.04% during the first quarter to $1.79 billion. The stock declined by only 2.31% during that period. Additionally, heading into the second quarter, a total of 48 of the hedge funds tracked by Insider Monkey held long positions in this stock, down significantly by 17 from the end of the fourth quarter. Nonetheless, Schlumberger did post modest gains of over 2% in the second quarter, though it has since given most of them back in July.
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Insider Monkey also tracks insider moves in companies such as Schlumberger Limited. (NYSE:SLB) to see whether executives inside these companies are confident in their firms’ shares. Whereas there have been no purchases made by insiders recorded so far this year, there have been a few sales. Director Tore Sandvold sold 2,000 shares of the firm on June 26. He previously sold 6,750 shares of the firm as well, on June 2. Vice President Mark Danton sold 5,184 shares of the firm on April 22 after selling 3,373 shares a day earlier.
Keeping these factors in mind, we’re going to go over the fresh smart money activity regarding Schlumberger Limited.
What does the smart money think about Schlumberger Limited. (NYSE:SLB)?
Of the funds tracked by Insider Monkey, Edgar Wachenheim‘s Greenhaven Associates had the largest position in Schlumberger Limited. (NYSE:SLB), of 4.32 million shares worth close to $360.1 million, comprising 6.5% of its total 13F portfolio. Coming in second is Ken Fisher of Fisher Asset Management, with a $348 million position held in 4.17 million shares; the fund has 0.7% of its 13F portfolio invested in the stock. Similar hedgies that hold long positions contain Phill Gross and Robert Atchinson’s Adage Capital Management, Jim Simons’ Renaissance Technologies, and David E. Shaw’s D.E. Shaw & Co., L.P..
Since Schlumberger Limited. (NYSE:SLB) has experienced bearish sentiment from hedge fund managers, there is a sect of money managers that elected to cut their positions entirely in the first quarter. Interestingly, David Costen Haley‘s HBK Investments dumped the biggest stake of the 700 funds watched by Insider Monkey, dumping a position of call options underlying 500,000 shares, worth about $42.71 million. Howard Guberman’s fund, Gruss Asset Management, also dumped its position of call options underlying 470,000 shares, worth about $40.14 million.
Because the smart money are placing their bets elsewhere, and Schlumberger Limited. (NYSE:SLB) is facing a decline which they foresee to continue over the next few quarters, we advise investors to follow the smart money into other investing opportunities, which can be found elsewhere on Insider Monkey.
Disclosure: None
