Schlumberger Profit Falls Sharply
October 20 2016 - 5:52PM
Dow Jones News
By Tess Stynes
Schlumberger Ltd. said its third-quarter earnings fell 82% on
lower revenue and expenses related to the oil-field services
acquisition of Cameron International Corp. earlier this year.
Schlumberger and other companies in the oil-field services
sector have been hurt by weak demand from oil and natural-gas
producers for services such as drilling and completing oil-and-gas
wells.
Chief Executive Paal Kibsgaard said Schlumberger's business
stabilized in the third quarter, though visibility remains limited
regarding spending by oil-and-gas companies for 2017 because the
company's customers are still in their planning stages.
"We maintain that a broad-based V-shaped recovery is unlikely
given the fragile financial state of the industry, although we do
see activity upside in 2017 in North America land, the Middle East
and Russia markets, " Mr. Kibsgaard said.
Schlumberger's results come a day after rival Halliburton Co.
posted a small third-quarter profit that its executives attributed
to U.S. energy company customers starting to return to drilling
this summer as crude prices moved back toward $50 a barrel.
Still Halliburton executives sounded a note of caution that the
fourth quarter could slow due to holiday and seasonal
weather-related downtime before activity picks back up in early
2017. It was also the first quarter Halliburton was relieved of
hefty charges related to its failed tie-up with rival Baker Hughes
Inc., which is scheduled to report third-quarter results
Tuesday.
The three oil-services giants each have shed thousands of
workers in efforts to offset weaker demand from energy producers
during the downturn.
In all, Schlumberger reported a third-quarter profit of $176
million, or 13 cents a share, down from $989 million, or 78 cents a
share, a year earlier. Excluding items such as acquisition-related
charges, adjusted per-share earnings were 25 cents. Analysts polled
by Thomson Reuters expected per-share profit of 22 cents.
Revenue declined 17% to $7.02 billion, while analysts expected
$7.08 billion.
In Schlumberger's North American business, revenue dropped 25%
to $1.7 billion. Outside the U.S., Schlumberger's revenue declined
13% to $5.25 billion.
The three months ended Sept. 30, marked the second period that
Schlumberger's results include Cameron, which makes drilling
equipment and supplies maintenance equipment to pipelines,
refineries and oil-and-gas wells.
Write to Tess Stynes at tess.stynes@wsj.com
(END) Dow Jones Newswires
October 20, 2016 17:37 ET (21:37 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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