Friday, Oilfield services company Schlumberger Ltd. (SLB) said its second quarter profit rose 13%, as "extremely high commodity prices" led operators to increase their budgets overseas. Citing consumer response to current commodity price levels, the company reiterated its 'stronger for longer' view of the current cycle of exploration and production spending.
Q2 Results
The company posted second quarter net income of $1.42 billion, up 13% from $1.26 billion reported in the year-ago quarter. Earnings per share rose to $1.16 from $1.02 in the same quarter of last year, and came above $1.12 per share average expected by 23 analysts polled by First Call/Thomson Financial.
Second quarter revenues totaled $6.75 billion, up from $5.64 billion in the prior-year period, and surpassed thirteen Wall Street analysts' consensus revenue estimate of $6.48 billion.
The company stated that results benefited by increased drilling efficiency in the North Sea, improved performance and lower start-up costs on IPM projects in Mexico and Russia, and a favorable exploration mix, particularly in the North Sea, eastern Siberia and South East Asia. "The quarter also saw increased demand for well-placement technologies and rigless work as operators strive to increase production from existing fields," the company said in the statement.
Andrew Gould, Schlumberger chairman and chief executive officer said, "At the half year, the uncertainty around the direction of natural gas drilling in North America has been removed and extremely high commodity prices have led operators to increase their budgets overseas. We anticipate that approximately 35 new offshore rigs will enter the fleet in the remaining half of the year."
Other Metrics
Cost of goods sold and services during the quarter were $4.61 billion, up from $3.74 billion incurred in the year-earlier quarter. Research & engineering expenses increased to $197.4 million from $1.74.7 million last year, and marketing expenses rose to $25.9 million from $19.9 million in the second quarter of 2007. While, general & administrative expenses ascended to $146.1 million from $119.1 million prior year, interest expenses declined to $61.4 million from $66.3 million in the same period of 2007.
Segments Review
The company's Oilfield services generated second quarter revenue of $6.07 billion, an increase of 22%, compared to $4.97 billion in the prior-year quarter. Pretax operating income for this segment advanced 13% to $1.70 billion from $1.51 billion in the comparable quarter of the previous year. Pretax operating margin increased 129 basis points or bps to reach 28.1%.
Second quarter revenue at WesternGeco edged up 1% to $671 million from $665 million last year. But, the segment's pretax operating income dropped 9% to $196 million from $216 million reported a year earlier.
Peer Comparison
Among Schlumberger's rivals, Houston, Texas-based Baker Hughes Inc. (BHI) is due to release its quarterly financial results on July 22. Analysts polled by First Call/Thomson Financial expect the company to report earnings of $1.24 per share on revenues of $2.76 billion for the quarter.
Another Houston, Texas-based competitor, BJ Services Co. (BJS) would report its third quarter results on July 22. Wall Street analysts have a consensus earnings estimate of $0.40 per share on revenues of $1.24 billion for the quarter.
Yet another peer, Halliburton Co. (HAL) is scheduled to announce its quarterly results on July 22. Analysts are looking for earning of $0.68 per share, on revenues of $4.25 billion for the quarter.
Year-To-Date Results For the six-month period, the company reported net income from continuing operations of $2.72 billion, or $2.22 per share, compared to $2.44 billion, or $1.98 per share, for the six-months ended June 30, 2007. Net income for the period amounted to $2.76 billion or $2.25 per share.
Year-to-date revenues advanced to $13.0 billion from $11.1 billion in the corresponding period of the previous year.
Stock Movements
Schlumberger is currently trading at $101.13, up $4.35 or 4.49%. For the past 52-weeks, the stock has been trading between $72.30 and $114.84.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.