Based on 2012 revenues, the six largest providers of oilfield services are:

1. Schlumberger Ltd. (NYSE: SLB)

• Revenues: $42.1 billion

• Net income: $5.5 billion 2. Halliburton (NYSE: HAL)

• Revenues: $28.5 billion

• Net income: $2.6 billion 3. Baker Hughes Inc. (NYSE: BHI)

• Revenue: $21.4 billion

• Net income: $1.3 billion 4. National Oilwell Varco Inc. (NYSE: NOV)

• Revenues: $20.0 billion

• Net income: $2.5 billion 5. Weatherford International Ltd. (NYSE: WFT)

• Revenues: $15.2 billion

• Net loss: –$778 million 6. Cameron (NYSE: CAM)

• Revenues: $8.5 billion

• Net income: $751 million These companies provide tools and services—often of a very technical nature—to expedite the drilling activities of oil and gas producers and drilling companies.

i. Discuss the economic factors that may affect demand for the services provided by oilfield services companies, and explain a logical framework for analyzing and forecasting revenue for these companies.

ii. Explain how comparing the level and trend in profit margin (net income/sales) and revenue per employee for the above companies may help in evaluating whether one of these companies is the cost leader in the peer group.