Top Oilfield Services Stocks in 1Q16 by Revenue Growth

The Top Growth Oilfield Services Stocks for 1Q16

Comparing oilfield services and equipment companies

In this series, we’ll identify the highest- and lowest-growth US oilfield services and equipment (or OFS) companies based on analysts’ expectations. The companies we have selected for comparison are:

• Baker Hughes (BHI)

• Core Laboratories (CLB)

• Dril-Quip, Inc. (DRQ)

• FMC Technologies (FTI)

• Halliburton (HAL)

• Helmerich & Payne (HP)

• Nabors Industries (NBR)

• National Oilwell Varco (NOV)

• Oceaneering International (OII)

• Oil States International (OIS)

• Patterson-UTI Energy Inc. (PTEN)

• RPC, Inc. (RES)

• Schlumberger (SLB)

• Weatherford International (WFT)

We will compare these companies by:

• revenue

• EBITDA (or earnings before interest, tax, depreciation, and amortization)

• EPS (or earnings per share)

Will FMC Technologies be the holdout by revenue growth?

Wall Street analysts expect all the companies in our set to register revenue decline in 1Q16 compared to 4Q15. Among them, analysts expect FMC Technologies to register the lowest adjusted revenue decline in our group. FTI can see a 10% revenue fall in 1Q16 compared to 4Q15.

In 1Q16, FTI’s management believes its large projects in the Subsea segment will perform resiliently while its order backlog for the smaller Subsea projects may decline further. FTI’s Forsys Subsea joint venture with Technip received an integrated FFED (or front-end engineering and design) contract with integrated major Statoil ASA (STO) in early 2016. The project aims to reduce its subsea field development cost level. Such projects can enhance FTI’s revenue prospects.

OII follows FTI closely

Oceaneering International’s (OII) adjusted revenue is expected to fall by 11% in 1Q16 over 4Q15. This would be the second-lowest revenue fall in our set. OII’s products and services help extend the producing life of existing offshore fields and to perform decommissioning work. This may drive OII’s revenues forward.

On the other hand, market uncertainty, falling energy prices, and reduced demand for OII’s services and products should reduce OII’s revenues in 1Q16.

Schlumberger’s expected revenue growth

Schlumberger, the largest OFS company, is expected to see an 11.5% revenue fall in 1Q16 over the current quarter. Innovative technological solutions are expected to gain increasing share in SLB’s revenue base. Schlumberger comprises 0.51% of the SPDR S&P 500 ETF (SPY). For a detailed discussion on SLB, please Against the Odds: How Schlumberger Keeps Delivering.

Next, we will find out the five lowest OFS companies by revenue growth, as expected in 1Q16.

Continue to Next Part

Browse this series on Market Realist:

• Part 2 - Lowest Revenue Growth for Oilfield Services Stocks in 1Q16

• Part 3 - Top Oilfield Services Stocks in 1Q16 by EBITDA Growth

• Part 4 - Worst-Performing Oilfield Services Stocks in 1Q16 by EBITDA Growth