Jim Cramer on Schlumberger Limited (SLB): A Challenging Year
Sunday, Oct 27, 2024 6:45 am ET
1min read Schlumberger Limited (SLB), a prominent player in the oil and gas industry, has faced a challenging year, according to Jim Cramer, host of CNBC's Mad Money. Despite the sector's overall growth, SLB's performance has lagged behind its competitors. This article explores the factors contributing to SLB's underperformance and analyzes its financial performance in 2022.
SLB's international business has outperformed its North American operations in recent years. In 2022, the company's international revenue grew by 14% year-on-year, while its North American revenue increased by a mere 3%. This disparity can be attributed to several factors, including the impact of geopolitical events and strategic decisions made by the company.
The conflict in Ukraine and the subsequent sanctions on Russia have had a significant impact on SLB's operations. The company suspended new investments and technology deployment in Russia, which affected its financial performance. Additionally, the divestment of certain businesses in North America during 2020 has contributed to the region's underperformance.
SLB's cash flow and dividend payouts have evolved throughout 2022, reflecting the company's financial performance. The company reported a cash flow from operations of $1.30 billion in the fourth quarter of 2021, increasing to $1.93 billion in the first quarter of 2022. However, the company's free cash flow decreased from $1.30 billion in the fourth quarter of 2021 to $1.25 billion in the first quarter of 2022. The board approved a 40% increase in the cash dividend to $0.175 per share in the first quarter of 2022.
In conclusion, Jim Cramer's assessment of SLB's performance in 2022 highlights the challenges faced by the company in its North American operations and the impact of geopolitical events on its financial results. Despite these challenges, SLB's international business has shown resilience and growth, indicating that the company remains a strong player in the global oil and gas industry. As the company continues to navigate the complexities of the energy landscape, investors will be watching closely to see how SLB responds to these challenges and capitalizes on its strengths.
SLB's international business has outperformed its North American operations in recent years. In 2022, the company's international revenue grew by 14% year-on-year, while its North American revenue increased by a mere 3%. This disparity can be attributed to several factors, including the impact of geopolitical events and strategic decisions made by the company.
The conflict in Ukraine and the subsequent sanctions on Russia have had a significant impact on SLB's operations. The company suspended new investments and technology deployment in Russia, which affected its financial performance. Additionally, the divestment of certain businesses in North America during 2020 has contributed to the region's underperformance.
SLB's cash flow and dividend payouts have evolved throughout 2022, reflecting the company's financial performance. The company reported a cash flow from operations of $1.30 billion in the fourth quarter of 2021, increasing to $1.93 billion in the first quarter of 2022. However, the company's free cash flow decreased from $1.30 billion in the fourth quarter of 2021 to $1.25 billion in the first quarter of 2022. The board approved a 40% increase in the cash dividend to $0.175 per share in the first quarter of 2022.
In conclusion, Jim Cramer's assessment of SLB's performance in 2022 highlights the challenges faced by the company in its North American operations and the impact of geopolitical events on its financial results. Despite these challenges, SLB's international business has shown resilience and growth, indicating that the company remains a strong player in the global oil and gas industry. As the company continues to navigate the complexities of the energy landscape, investors will be watching closely to see how SLB responds to these challenges and capitalizes on its strengths.
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