Friday, June 5, 2020

Schlumberger Beats Street on North American Activity

Posted by October 17, 2014

3rd-qtr profit $1.49/share, vs estimate of $1.46; total revenue rises 9 pct to $12.65 bln. Reports strong drilling activity in North America.

Schlumberger Ltd, the world's largest oilfield services company, posted a third-quarter profit that beat estimates for at least the ninth consecutive quarter, helped by strong drilling activity in North America.

Schlumberger, which provides drilling technology and equipment, well construction services and seismic surveys for oil and natural gas companies, said revenue from its U.S. operations rose 18 percent to $4.26 billion in the quarter, accounting for a third of total revenue.

Revenue from the company's international business rose 5 percent to $8.31 billion, as its resilient Middle East and Asia businesses trumped "significant headwinds" in Northern Iraq and sanctions against Russia, Schlumberger said.

Schlumberger, which drills with Rosneft on the island of Sakhalin, had warned in August that sanctions against Russia would hurt its third-quarter profit by as much as 3 cents per share. [ID:ID:nL4N0QI44G]

The company has the lowest exposure to North America among the big four oilfield service providers, which include Halliburton Co, Baker Hughes Inc and Weatherford International Plc.

Baker Hughes reported a lower-than-expected profit for the first time in five quarters earlier on Thursday, as political tensions in Libya and Iraq and a sharp fall in drilling in the Gulf of Mexico hurt margins.

Baker Hughes said its clients would reconsider projects if oil prices fell to and remained at $75 per barrel for a few months.

Ample supply and weak demand have hit oil prices in recent months. Global benchmark Brent crude futures rose to $84.49 a barrel on Thursday, after falling to $83 earlier, off nearly 28 percent from a June high.

U.S. crude prices also rose to $82.83 a barrel after falling to a two-year low of $80 a barrel.

Schlumberger's shares have lost over a fifth of their value in the past three months, mirroring a fall in global oil prices, while Baker Hughes' stock has declined 30 percent.

"Weakening oil prices really don't have an impact on services companies' results. Outside of sentiment issues that affect the stock, it doesn't influence the companies," Societe Generale (SGE.SG) analyst Edward Muztafago said.

Net income attributable to Houston, Texas-based Schlumberger rose to $1.95 billion, or $1.49 per share, in the third quarter ended Sept. 30, from $1.72 billion, or $1.29 per share, a year earlier..

Total revenue rose 9 percent to $12.65 billion.

Analysts on average expected earnings of $1.46 per share on revenue of $12.63 billion, according to Thomson Reuters I/B/E/S.

Schlumberger shares closed up 1.6 percent at $90.64 on the New York Stock Exchange. They rose about 1.5 percent to $92 in after market trading.

By Shubhankar Chakravorty

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