Jim Cramer, of CNBC, recently provided an overview of oil service stocks following the release of earnings reports from major companies in the sector. He expressed confidence in the potential for further growth in stocks such as SLB and Halliburton due to strong international business and operational efficiency. Both companies have demonstrated gains in the wake of their earnings reports, with Halliburton experiencing a 4.33% increase and SLB rising by 2.48% by the close of Wednesday’s trading session. According to Cramer, both companies have the potential for continued growth, particularly in light of improved activity overseas in the oil service industry.”I think SLB and Halliburton deserve all of this upside and more,” said Cramer. “Yes, I think they can keep climbing. Yes, the growth outlook for the oil service industry is better than I thought going into earnings, primarily thanks to increased activity overseas.”In its recent earnings report, SLB highlighted the strength of its international business, which has consistently delivered double-digit growth over the past 10 quarters. Cramer also found encouragement in SLB’s decision to increase its dividend by 10%, signaling confidence from company management regarding future success. Halliburton, while not demonstrating as robust a cash flow as SLB, also showcased a strong international business and expressed confidence in overseas production over the coming years.Cramer had previously expressed concerns about the potential negative impact of increased operational efficiency on oil service companies, posing the question of whether they would suffer due to decreased demand for rigs as a result of improved oil extraction capabilities. However, Halliburton mitigated Cramer’s concerns by explaining how they are maximizing the output from each well, ultimately leading to improved margins and profitability. “Halliburton explained how they’re getting more and more money out of each well, too, so, at worse, it’s a wash,” he said. “Plus, as they help producers expand and extend the life of individual wells, they make more money and incur fewer costs themselves, leading to improved margins.”Jim Cramer’s Guide to Investing
