Bad weather in North America and Australia, political unrest in the Middle East and North Africa, and a slow return to drilling in the US Gulf of Mexico have all led to weak expectations for the oil field services companies. None of these caution signals missed Schlumberger Ltd. (NYSE: SLB), the world’s largest services company by market cap, which reported first quarter EPS this morning of $0.71, down sequentially from $0.85 and below the latest analysts’ consensus estimate of $0.76. Revenue also fell sequentially, from $9.07 billion to $8.72 billion in the first quarter, and below analysts’ estimates of $8.82.

Also reporting today was Weatherford International, Inc. (NYSE: WFT), which posted adjusted EPS of $0.10 ($0.08 EPS on GAAP basis) on revenue of $2.86 billion. The company was expected to post EPS of $0.18 on revenue of $2.82 billion. Halliburton Co. (NYSE: HAL) reported strong earnings on Monday, but we noted in our coverage that recent sentiment on the oil field services sector has been negative. [https://a673b.bigscoots-temp.com/2011/04/18/halliburton-earnings-surge-but-services-sector-has-risks-ahead-hal-slb-bhi-wft-oih/] Baker Hughes Inc. (NYSE: BHI) reports earnings next week and is expected to post EPS of $0.78 on revenue of $4.29 billion.

The best thing that can be said about Schlumberger’s first quarter is that at least the company did not get sued by BP plc (NYSE: BP). The British oil giant has filed suit against Halliburton for at least $40 billion for “misconduct” that contributed to the explosion of the Deepwater Horizon and the deaths of 11 workers. BP has already filed lawsuits against Transocean Ltd. (NYSE: RIG), owner and operator of the Deepwater Horizon, and Cameron International Corp. (NYSE: CAM), maker of the failed blowout preventer on the Macondo well.

BP did not specify an amount in its suit against Halliburton, other than to say it would seek damages up to the total cost of the spill from Halliburton. BP’s suit against Transocean seeks $40 billion and the suit against Cameron wants an amount equal to whatever damages are levied against BP by the US government.

The suits have all been filed to beat a court-imposed deadline of yesterday to preserve the right to file suits related to the Macondo disaster.

Shares of Schlumberger are indicated up about 2% before the market opens this morning, while shares of Weatherford are pointing down by more than -3.5%. Transocean shares are also indicated down by about -2.8%. There is no action yet on Halliburton or the others.

Paul Ausick

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