JS Earnings Call Notes – SLB, GOOGL

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Jeremy S., an investment analyst here in Southern California, has started to contribute to Avondale’s company notes database. Below are quotes from some of the calls that Jeremy has read this week.

 

Google (GOOGL) CFO Ruth Porat said she is bringing further expense discipline and balance to the company 

“The sequential deceleration in expense growth achieved in the second quarter reflects in part the benefit of expense discipline discussed in prior calls. A key focus is on the levers within our control to manage the pace of expenses while still ensuring and supporting our growth. We will do this while we continue to invest in engineering talent to keep us preeminent in innovation globally.”

But she also reminded investors that the company’s goal of creating terrific products that impact billions of people will require significant expenditures 

“Google’s goal is to develop great new services that significantly improves the lives of as many people as possible. Solving problems for users at scale ultimately results in monetization opportunities. How we prioritize and focus on these opportunities remains paramount, both for our employees, who remain inspired by the opportunity to work on the most cutting edge developments with maximum global impact and for our shareholders.”

Google (GOOGL) Chief Business Officer Omid Kordestani stated the company now has 5 different services which have one billion users

“First, our core products continue to do well and users love them. In fact, Google Search, YouTube, Android, Chrome and Google Maps, each have over one billion users.”

Google (GOOGL) Chief Business Officer Omid Kordestani thinks the company nailed the shift to mobile

More Google searches now take place on mobile devices than on computers in ten countries, including the U.S. and Japan, two of our largest markets. And we know that when people search on their mobile phones, they’re looking for immediacy and action. In fact, 30% of mobile queries are related to location and our efforts around local search are helping consumers to find relevant information fast.  We’re investing in creating great mobile experiences for people across Google products.”

Omid went on to declare that the Youtube audience reach and engagement has accelerated 

“On mobile alone, YouTube reaches more 18 to 49 year old in the U.S. than any U.S. cable network. And the number of users coming to YouTube, who start at the Youtube homepage similar to the way they might turn on their TV is up over three times year-on-year plus once users are in YouTube, they are spending more time per session watching videos, on mobile the average viewing session is now more than 40 minutes up more than 50% year-over-year.”

 

 

 

Schlumberger (SLB) CEO Paal Kibsgaard said he doesn’t expect the company’s immediate pricing power to rise in the event of a rebound in oil prices

“In this environment, we focus on carefully balancing market share growth with protection of operating margin and by negotiating pricing concessions in return for additional work, integration opportunities or improved contract terms, knowing from experience that any permanent pricing concessions that we make will be very hard to recover even as market conditions improve.”

And their business continues to be all about helping their clients extractin oil more efficiently

While we set goals for new technologies and increasing elements of service integration, we also target a 10-fold reduction in customer non-productive time, a doubling in asset utilization, a 25% reduction in inventory days, a 20% increase in workforce productivity and a 10% lowering of unit support costs.

Schlumberger (SLB) CEO Paal Kibsgaard stated that North America has seen the largest percentage drop in oil exploration and production expenditures and the oil services market will remain weak in the near-term

“Turning to our industry, the largest drop in E&P investments is, as expected, occurring in North America, where 2015 spend will now largely be down by more than 35%, driven by both pricing and activity on land. We do believe that the North American rig count has now reached bottom, but that we will only see a slow increase in drilling and completion activity in the second half of the year, which will not make any material dent in the massive overcapacity that has been created. This again means that there will be little to no improvement in pricing levels and, hence, the market will still remain very challenging for the foreseeable future.”