NorthAmericaEquityResearch29October2019OilServices&Equipment3Q19EarningsPreviewPartII:Setups,Hurdles&QuickTakesOilServicesandEquipmentSeanCMeakim,CFAAC(1-212)622-6684sean.meakim@jpmorgan.comBloombergJPMAMEAKIMJ.P.MorganSecuritiesLLCDanyelJDesa(91-22)6157-3301danyel.j.desa@jpmchase.comJ.P.MorganIndiaPrivateLimitedAndrewPHerring,CFA(1-212)622-8585andrew.p.herring@jpmorgan.comJ.P.MorganSecuritiesLLCCoreyMergenthaler,CFA(1-212)622-1167corey.mergenthaler@jpmchase.comJ.P.MorganSecuritiesLLCSeepage42foranalystcertificationandimportantdisclosures,includingnon-USanalystdisclosures.J.P.Morgandoesandseekstodobusinesswithcompaniescoveredinitsresearchreports.Asaresult,investorsshouldbeawarethatthefirmmayhaveaconflictofinterestthatcouldaffecttheobjectivityofthisreport.Investorsshouldconsiderthisreportasonlyasinglefactorinmakingtheirinvestmentdecision.www.jpmorganmarkets.comWe’replowingaheadwith3Q19earnings,andinthisnoteweprovideaconsolidatedsetofearningspreviewsacrossthebalanceofourcoveragereportingfrom10/29onwards(ourfirstinstallmentisavailablehere),includingquicktakesonwherewethinkbuy-sideandsell-sideexpectationsdeviateandwhatpotentialcatalystswe'llbemonitoringonthecalls.Amorein-depthsummaryofourthoughtsandestimatesv.consensusforeachstockcanbefoundintheinterior.Thusfarthisearningsseasonhasbeena“coverthebadnews”event,particularlyforNAMonshorestocks(frac+12%,landrigs+8%v.OSX+5%)asyetanother“buythelastcut”narrativeisworkingonone-sidedshortpositioning.Meanwhile,“safetystocks”aregettingsold(FTI-10%)oratleastnotparticipatingintherally(BKR/NOVavg.-2%).We’reskepticalthere'senoughlegsinthissurgetosustainitselfthroughthenextfewweeksofgenerallyweakresultsandtougherguides.Whilemosthaveflockedtointernationalandoffshorefordirectionalimprovement,offshoredatapointshavebeenfairlyminimal,withfewlargeequipmentordersandmutedfleetupdatesfromoffshoredrillersDOandRIG.Belowweprovide“oneliners”onthepreviewsinthisreport,categorizedbyourexpectedmarketreactiontotheprintsandhowwe’drespond...
