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Schlumberger Investor Patience Will Pay Off

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Early in the earnings season, energy services leader Schlumberger (SLB) - Get Report delivered mixed-fourth quarter results. Judging by the slightly bullish reaction following the print, however, investors seem to have welcomed the rare improvement in margins and cash flow, even if revenues continued to lack traction on the back of a struggling North America market.

The divide between the company’s North America business, which represents 30% of Schlumberger’s fourth quarter revenues, and the international businesses could not have been clearer. As reasonably expected, drilling and reservoir characterization did well relative to production, given the segments’ heavier exposure to international markets. In addition to achieving top-line growth in Latin America and the Middle East, Schlumberger seems to have also benefited from a milder winter in Europe.

North America land, however, showed no early signs of regaining its footing. The exploration and production (E&P) space continues to be........

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