The recent slowdowns related to bad weather in Russia, China, and North America don't seem to phasing this drilling company, which may account for why MoneyShow's Jim Jubak is increasing his target price as of April 21.

It's swell that on April 17 Schlumberger (SLB) beat Wall Street earnings estimates of $1.20 a share for the first quarter by a penny a share. Earnings increased 25% from the first quarter of 2013. The company reported a sequential 6% decline in revenue, due primarily to slowdowns related to bad weather in Russia, China, and North America. Year over year revenue climbed by 6%. To get 25% earnings growth out of a 6% increase in revenue, a company has to be killing on margins. Year over year, pre-tax operating margin climbed by 2.48 percentage points. Return on invested capital climbed again to 13.3%.

But the eye-popping number, to me, anyway, was free cash flow. In the quarter, Schlumberger recorded $688 million in free cash flow. In 2013, the company generated $5.5 billion in free cash flow and it looks like Schlumberger will show $5.6 billion in free cash flow in 2014.

And the company seems very certain that the current level of margins and cash flow will continue for a while. Schlumberger announced that it would accelerate the execution of its $10 billion stock buyback program to two and a half years instead of the earlier projected five years. (The company will also pay a quarterly dividend of 40 cents a share to shareholders of record as of June 4.)

I think it's safe to say that Schlumberger is in a sweet spot. That's a result, not so much from a big upsurge in drilling activity—revenue growth of 6% isn't a big upsurge—but of increased profit margins that result from the kind of work that oil companies are hiring Schlumberger to do. Increasingly, the company's contracts are for integrated oil field management, where a company—either drilling in onshore shale geologies or offshore in deep waster—is hiring Schlumberger to do it all. And, in return for contracts that shift some of the risk of meeting production goals to Schlumberger, the oil services company is seeing fatter margins and production sharing agreements. That's the character of the three-multiyear contracts that Mexico's Pemex just awarded to Schlumberger, with a value of $1.9 billion. The trend toward integrated management contracts also gives Schlumberger an added competitive advantage over smaller oil services companies that can't do it all.

Schlumberger is a member of both my 12-18 month Jubak Picks portfolio and my long-term Jubak 50 portfolio. As of today, April 21, I'm raising my target price in the Jubak's Picks portfolio to $120 a share by October 2014 from my current target of $107 a share. The stock traded at $101.65 today, April 21, at 3:30 PM New York time. (Schlumberger does have exposure to the Russian oil and gas industry, so any further sanctions against Russia because of escalating pressure by Russia on Ukraine could certainly ding the stock. I'd regard that as an opportunity to pick up more shares.)

Full disclosure: I don't own shares of any of the companies mentioned in this post in my personal portfolio. When in 2010 I started the mutual fund I manage, Jubak Global Equity Fund, I liquidated all my individual stock holdings and put the money into the fund. The fund did not own shares of Schlumberger as of the end of December. In preparation for closing the fund at the end of May, as of the end of March I had moved the fund's holdings almost totally to cash.