Schlumberger profit up in Q3

Schlumberger18 October 2013, News Wires – Oilfield services giant Schlumberger posted a stronger set of financial results in the third quarter, largely due to a buoyant North American market.

The company’s international operations also improved with the Middle East in particular proving strong, while there was heightened activity in the Asia offshore sphere.

Net profit for the three months to the end of September was $1.73 billion as against $1.43 billion a year earlier.

Revenues reached a quarterly record of $11.61 billion as compared with $10.5 billion in last year’s third quarter.

This meant Schlumberger was able to absorb the much-increased cost of sales, which rose from $8.24 billion to $8.93 billion.

“Results were led by North America with a new high in overall revenue, supported by solid offshore activity and the seasonal rebound of activity in western Canada,” chief executive Paal Kibsgaard said on Friday.

“US land operations showed impressive resilience through improved efficiency, new technology penetration and market share gains in a highly competitive market with largely constant rig count.”

For international operations, there was strong growth in Saudi Arabia and Iraq as well as increased offshore activity in Asia and onshore drilling in China.

North America revenue grew 7% while international revenue was up 3%, setting new highs for both markets.

Drilling revenue grew 3%, reservoir characteristics revenue shot up 7% and production revenue was up 3%.

Analysts at Cowen & Company said the earnings had, in its opinion, “moderately positive implications” for Schlumberger’s stock.

The service company’s earnings-per-share sum of $1.29 was an increase on Cowen’s estimate of $1.25 and the market consensus of $1.24.

Kibsgaard continued: “The global economic outlook remains largely unchanged as relatively encouraging news among OECD countries and in China has offset lower growth expectations in some of the major emerging economies.

“In the US, the underlying trends are positive and the level of macroeconomic uncertainty was reduced in the near term following the temporary resolution of the fiscal debate.

“Demand for oil in 2013 has again been revised upward and current estimates for 2014 point to even stronger growth in demand.

“The upward exploration and production spend revision made in June continues to be confirmed by rig count improvement and increased customer activity.”

– Upstream

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