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Gold/Mining/Energy : Strictly: Drilling and oil-field services -- Ignore unavailable to you. Want to Upgrade?

To: Rosemary who wrote (7801)	1/13/1998 8:33:00 AM
From: jad	Read Replies (1) \| Respond to of 95453

to all: Schlumberger (SLB...69 9/16) from Briefing Trader Schlumberger provides drilling, oil well logging and measurement-while-drilling services to the petroleum industry... For the nine months ended 9/97 company posted revenue and earnings growth of 20% and 53%, respectively... Earnings growth reflects the absence of over $300 mln in unusual items... Despite strong growth, stock and oil services sector in a full retreat since late October on fears of slowing demand for oil due to Asian crisis. Earnings Alert Due to report earnings on Wednesday... Street looking for gain in Q4 of $0.76, a year-over-year improvement of 46% and a sequential jump of 5.6% (slightly below average Q4 sequential jump over past three years of 8.6%). No change in mean estimate for Q4 or FY97 in last month. Positive earnings surprises in past three quarters. (+10%, +11%, +8.2%)...Surprise bar set high... Even if company beats estimates by 3%-5% it might not be enough given recent history and growing concerns over future prospects. FY97 est. = $2.61 (+50%); FY98 est. = $3.34 (28%)... well above market growth rates. Market likely to dismiss strong Q4 growth due to chaging economic landscape... Declining oil prices... In other words could be a no win situation for SLB. Past Results Fundamental Profile Indicator SLB Industry - Oil Services P/E (TTM) 29.1 27.6 P/B (MRQ) 5.5 4.4 P/S (TTM) 3.3 NA ROE 20% 20% Nxt 5 yr estimated growth rate 20.7% 21.2% TTM = trailing twelve months; MRQ = most recent quarter... SLB also sports a beta of 0.95 and a market cap of $34.9 bln. Ratings Backdrop Current ratings: 11strong buy, 3 moderate buy, 8 hold, 0 moderate sell, 1 strong sell. Recent changes: CS First Boston upped its rating from hold to buy on 1/5/98... On 11/17/97, AG Edwards raised its rating to buy from hold... One wek earlier SBC Warburg Dillon Reed started coverage of SLB with a buy. Technical Picture Stock down 26% from its recent high. SLB broke through its 200-day moving average last week for the first time since late 1995. 50-moving average beginning to trend lower, though still above 200-day ma. Next support at 66 7/16 (Fibonacci retracement level), with penetration resulting in slide to the 60 area (congestion)... Key resistance is far off at 81 7/8.