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Schlumberger Ltd  (NYSE:SLB) E10: $3.25 (As of Sep. 2017)

E10 is a concept invented by Prof. Robert Shiller, who uses E10 for his Shiller P/E calculation. E10 is the average of the inflation adjusted earnings of a company over the past 10 years.

Schlumberger Ltd's adjusted earnings per share data for the three months ended in Sep. 2017 was $0.390. Add all the adjusted EPS for the past 10 years together and divide 10 will get our e10, which is $3.25 for the trailing ten years ended in Sep. 2017.

As of today, Schlumberger Ltd's current stock price is $62.14. Schlumberger Ltd's E10 for the quarter that ended in Sep. 2017 was $3.25. Schlumberger Ltd's Shiller PE Ratio of today is 19.12.

During the past 13 years, the highest Shiller PE Ratio of Schlumberger Ltd was 98.07. The lowest was 16.32. And the median was 27.61.


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

* Premium members only.

Schlumberger Ltd Annual Data

Dec07 Dec08 Dec09 Dec10 Dec11 Dec12 Dec13 Dec14 Dec15 Dec16
E10 Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 3.07 3.59 3.88 3.86 3.45

Schlumberger Ltd Quarterly Data

Dec12 Mar13 Jun13 Sep13 Dec13 Mar14 Jun14 Sep14 Dec14 Mar15 Jun15 Sep15 Dec15 Mar16 Jun16 Sep16 Dec16 Mar17 Jun17 Sep17
E10 Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 3.58 3.45 3.39 3.30 3.25

Competitive Comparison
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap.


Calculation

E10 is a concept invented by Prof. Robert Shiller, who uses E10 for his Shiller P/E calculation. When we calculate the today's Shiller P/E ratio of a stock, we use today’s price divided by E10.

What is E10? How do we calculate E10?

E10 is the average of the inflation adjusted earnings of a company over the past 10 years. Let's use an example to explain.

If we want to calculate the E10 of Wal-Mart (WMT) for Dec. 31, 2010, we need to have the inflation data and the earnings from 2001 through 2010.

We adjusted the earnings of 2001 earnings data with the total inflation from 2001 through 2010 to the equivalent earnings in 2010. If the total inflation from 2001 to 2010 is 40%, and Wal-Mart earned $1 a share in 2001, then the 2001's equivalent earnings in 2010 is $1.4 a share. If Wal-Mart earns $1 again in 2002, and the total inflation from 2002 through 2010 is 35%, then the equivalent 2002 earnings in 2010 is $1.35. So on and so forth, you get the equivalent earnings of past 10 years. Then you add them together and divided the sum by 10 to get E10.

For example, Schlumberger Ltd's adjusted earnings per share data for the three months ended in Sep. 2017 was:

Adj_EPS= Earnings per Share (Diluted) /CPI of Sep. 2017 (Change)*Current CPI (Sep. 2017)
=0.39/246.819*246.819
=0.390

Current CPI (Sep. 2017) = 246.819.

Schlumberger Ltd Quarterly Data

per share eps CPI Adj_EPS
200712 1.120 210.036 1.316
200803 1.090 213.528 1.260
200806 1.160 218.815 1.308
200809 1.250 218.783 1.410
200812 0.950 210.228 1.115
200903 0.780 212.709 0.905
200906 0.510 215.693 0.584
200909 0.650 215.969 0.743
200912 0.660 215.949 0.754
201003 0.560 217.631 0.635
201006 0.680 217.965 0.770
201009 1.380 218.439 1.559
201012 0.750 219.179 0.845
201103 0.690 223.467 0.762
201106 0.980 225.722 1.072
201109 0.960 226.889 1.044
201112 1.050 225.672 1.148
201203 0.970 229.392 1.044
201206 1.050 229.478 1.129
201209 1.070 231.407 1.141
201212 1.020 229.601 1.096
201303 0.940 232.773 0.997
201306 1.570 233.504 1.660
201309 1.290 234.149 1.360
201312 1.260 233.049 1.334
201403 1.210 236.293 1.264
201406 1.210 238.343 1.253
201409 1.490 238.031 1.545
201412 0.250 234.812 0.263
201503 0.760 236.119 0.794
201506 0.880 238.638 0.910
201509 0.780 237.945 0.809
201512 -0.800 236.525 -0.835
201603 0.400 238.132 0.415
201606 -1.560 241.018 -1.598
201609 0.130 241.428 0.133
201612 -0.140 241.432 -0.143
201703 0.200 243.801 0.202
201706 -0.050 244.955 -0.050
201709 0.390 246.819 0.390

Add all the adjusted EPS together and divide 10 will get our e10.


Explanation

If a company grows much fast than inflation, E10 may underestimate the company's earnings power. Shiller PE Ratio can seem to be too high even the actual P/E is low.

For the Shiller P/E, the earnings of the past 10 years are inflation-adjusted and averaged. The result is used for P/E calculation. Since it looks at the average over the last 10 years, the Shiller P/E is also called PE10.

The Shiller P/E was first used by professor Robert Shiller to measure the valuation of the overall market. The same calculation is applied here to individual companies.

Schlumberger Ltd's Shiller P/E Ratio of today is calculated as

Shiller PE Ratio=Share Price/E10
=62.14/3.25
=19.12

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

During the past 13 years, the highest Shiller P/E Ratio of Schlumberger Ltd was 98.07. The lowest was 16.32. And the median was 27.61.


Be Aware

Shiller PE Ratio works better for cyclical companies. It gives you a better idea on the company's real earnings power.


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