Early this morning, oil firm Schlumberger (NYSE: SLB) reported earnings of 78 cents per share -- which was considerably lower than last year's same-quarter results of $1.09 per share. While the results were worse than a year ago, SLB managed to top the consensus estimate by three cents. Quarterly revenue totaled $6.0 billion, which was off from last year's revenue of $6.29 billion.
SLB, which is the world's largest oilfield services company, attributed the lower results to a slump in energy demand, which forced customers to reduce activity and search for price reductions. The company also noted that the rate of decline in its oilfield services division dropped considerably compared to the fourth quarter, thanks mainly to a sharp drop in the firm's North American natural gas rig count. SLB stated, "Our visibility on 2009 has not materially changed from the end of the fourth quarter."
Technically, the stock is in the midst of an intermediate-term rally as it glides higher along the support of its 10-week moving average. Further support comes from SLB's 10- and 20-day moving averages as well. Nevertheless, the stock faces overhead resistance in the form of its 10-month moving average.
That said, the shares should find resistance in the $48 region before it can advance to its monthly trendline. This region acted as resistance in February and is in the process of stifling the stock, which could force a double-top formation. We will need to see if this morning's news results in a push higher for the stock, as it certainly needs a boost to fight through the two layers of overhead resistance.
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