Like clockwork, since, well, it is on a schedule, the company's first quarter earnings were released last week. You can download the conference call from here on the investor page. As always, it was chock full of interesting tidbits though the Q&A is of course the fun part.
The main focus was how low and how long, meaning how much lower will the industry slide and how long will it last before any recovery. That answer is really two answers because the industry is in two basic pieces: North America and everywhere else. The North American market, especially land activity is dominated by natural gas drilling. And natural gas drilling is suffering very badly (links to a .pdf file). (You will also note on the top right chart that Canada is strongly seasonal which is a result of a slow down in the spring because many regions become inaccessible after the spring thaw.) Another handy base link is here which has some interesting interactive maps. Anyway, North America = lots of pain, recovery maybe next year. I have some general comments about the overall economic situation and how it impacts North America for another day. The rest of the world is relatively better, but that's hardly a ringing endorsement of health, and Russia is behaving similarly to the North American market for the time being.
There were also several questions about the seismic arm of the company since any down turn usually leads to an even larger down turn in exploration. The view seems to be that the situation will be less than glamorous, but steady enough to maintain acceptable cash flow from that segment.
The overall financial results were apparently better than expected and the stock jumped last Friday when these earnings were released. However, I found that strange since there was really no fundamental change in the outlook since the Q4 call three months ago. The results were helped by very strong fiscal discipline and some advance planning that led to an advantage based on timing that will not be repeated. To me, it was an excellent example that many so-called financial professionals are actually idiots.