Oilfield services provider Schlumberger Ltd. (SLB: Quote) reported Friday a better-than-expected profit for its second quarter benefited by international performance, despite challenges in North America. According to Chief Executive Officer Paal Kibsgaard, solid activity growth and a consistent focus on execution led to strong results.
However, the company warned that the present climate of uncertainty would likely to remain for some time to come with the unsettled situation in the global economies.
Peer Baker Hughes Inc. (BHI: Quote) also posted higher second-quarter numbers in similar situations. Baker Hughes' Chief Executive Officer Martin Craighead said he is cautiously optimistic about the market outlook for the remainder of the year.
During the quarter, Schlumberger's service capacity tightened further and the company saw several significant new technology introductions. Schlumberger said its Production Management saw increased activity.
The company also noted that against these results, there were downward revisions of GDP growth and oil demand due to the worsening of the Eurozone crisis and the disappointing numbers from China and the US. These, along with the inventory builds from higher OPEC production, brought oil prices lower in spite of tight global spare oil capacity and potential production disruption due to geopolitical events.
"In the midst of such uncertainty, we are maintaining focus on what we can control, which is the planning and execution of our work. We are currently undertaking further initiatives to extend our leadership in execution and we believe that such actions, together with our international strength and our balanced portfolio in North America, should enable strong relative future performance," the company said in its statement.
For the second quarter, Schlumberger's net income attributable to the company increased to $1.40 billion or $1.05 per share from year-ago quarter's $1.34 billion or $0.98 per share.
Income from continuing operations grew to $1.38 billion or $1.03 per share from prior year's $1.11 billion or $0.81 per share.
The latest quarter results included charges of $0.02 per share, lower than last year's charges of $0.05 per share.
Excluding charges and credits, adjusted income from continuing operations attributable to Schlumberger climbed 20 percent to $1.4 billion or $1.05 per share from $1.17 billion or $0.86 per share last year. On average, 29 analysts polled by Thomson Reuters expected earnings per share of $1 for the quarter. Analysts' estimates typically exclude one-time items.
Revenues for the quarter, from oilfield services, climbed 16 percent to $10.45 billion from $8.99 billion in 2011, whereas 20 analysts estimated revenues of $10.41 billion for the quarter.
On a sequential basis, oilfield services revenue increased 5 percent from the first quarter, reflecting activity growth both offshore and in key land markets. The company noted that Latin America and Middle East & Asia Areas both progressed well, while Europe, CIS and Africa showed particular strength across the area.
In North America, revenues were hurt by the Canadian spring break-up and the weakness in the US land hydraulic fracturing market, while robust performance in other land businesses and in the US Gulf of Mexico benefited the results.
In pre-market activity, Schlumberger shares are currently trading at $69.93, up $1.29 or 1.88 percent.
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by RTT Staff Writer
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