Schlumberger's income up 9pc
New York, October 20, 2012
Steady growth in drilling activity outside North America gave a big lift to Schlumberger, the world's largest oil services company, but the US natural gas slump weighed even more than expected on rival Baker Hughes.
Baker, the industry's third-largest player worldwide, posted a lower-than-expected quarterly profit yesterday, sending its shares down nearly six per cent.
Schlumberger's earnings per share beat analysts' estimates by a couple of cents, but its stock fell more than 1pc amid an oilfield services selloff.
Schlumberger, which is based in Curacao and has major offices in Paris, The Hague and Houston, said its net income had risen 9pc to $1.42 billion, or $1.07 per share, from $1.30bn, or 96 cents per share, a year earlier. Excluding special items, earnings came to $1.08 per share, while analysts on average expected $1.06, according to Thomson Reuters I/B/E/S.
Revenue increased 11pc to $10.61bn, compared with the analysts' average estimate of $10.68bn.
Profit margins at Baker suffered from a slump in North American pressure pumping, used in hydraulic fracturing. Both it and Schlumberger had less work and weaker pricing power in that market as depressed natural gas prices pushed the number of US rigs targeting the fuel to a 13-year low.
Baker said Canadian activity was nearly 30pc lower than a year earlier, while the total rig count in markets such as Brazil, Colombia and Norway fell 17pc in third quarter from the second.
But both Schlumberger and Baker said they expected activity in international markets to rebound in the current quarter, despite recent signs from industry data that global oilfield activity could be slowing because of uncertainty about the world economy.
The latest count of active rigs outside North America, as measured by Baker, is up just 6pc this year at 1,254, and the company now expects the full-year average to be only 3pc higher than in 2011.
Schlumberger chief executive Paal Kibsgaard said a steady upward trend in international pricing had continued in the third quarter, and he maintained a forecast for 10pc growth in international activity for this year.-Reuters
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