Earnings trends are extremely important when evaluating stocks. At Wall St. Cheat Sheet, we view increasing earnings quarter-over-quarter as a simple way to gauge whether costs and the business model are stable. Then we like to analyze whether the company is outperforming peers in the sector. This is what we call the “E-Squared” investment analysis (‘E = Earnings Are Increasing Quarter-Over-Quarter’ + ‘E = Excellent Relative Performance Versus Peers and Sector’).
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Here’s your Cheat Sheet to how the top 5 oil services stocks rank via earnings trends:
Schlumberger Limited (NYSE:SLB): Current Price $76.50
|Revenue ($) in millions||27,580||22,980||28,930||39,670||42,320|
|Diluted EPS ($)||4.45||2.59||3.38||3.67||4.10|
Schlumberger has done well after 2009 and has steadily improved their top line and EPS every year since.
Next, our CHEAT SHEET investing framework asks us to drill down to the recent quarterly data:
|Quarter||Dec. 31, 2011||Mar. 31, 2012||Jun. 30, 2012||Sep. 30, 2012||Dec. 31, 2012|
|Revenue ($) in millions||12,320||10,660||10,490||10,650||11,210|
|Diluted EPS ($)||1.04||0.97||1.05||1.07||1.02|
The quarterly show, however, has not kept pace. Sales were higher during the last quarter, but profits dropped a bit…