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Friday, July 21, 2006

Widely Held 48 Hour Clock: Schlumberger Will Be Hard To Beat

Stocks: (SLB)(HAL)

Schlumberger, the huge oilfield services company, announced impressive quarterly results. With the scramble for new oil reserves, the company is likely to do even better than this in the future.
Revenue rose an astonishing 37% to $4.687 billion. Net income rose 78% to $857 million.

Exploration work by the companies customers lead Schlumberger's WestGeco unit operating income up 211% to $180 million.

Schlumberger also raised guidance.

To no ones surprise, Halliburton, an oilfield services competitor, saw revenue rise 12% to $5.5 billion. Its net income was up 51% to $592 million. Halliburton's military and government support businesses actually had a 3% drop in revenue, so the energy business carried the company. Schlumberger, more of an energy "pure play" had no such problems.

Schlumberger's stock now trades at $63, but it should be higher. The demand for the company's products is not likely to abate for a number of years. The 52-week high is $74.75, and no one should be surprise if it is broken in the coming months.

The affects of Halliburton's reliance on military and government business outside the energy sector was telling. The stock is down over 3% to $31.50, not far from its 12-month low of $24.

Douglas A. McIntyre can be reached at He does not own securities in companies that he writes about.

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