Schlumberger's Overseas Segments Drive Revenue Growth
October 18 2019 - 02:03PM
Dow Jones News
By Dave Sebastian and Allison Prang
Oil-field-services company Schlumberger Ltd. reported a
surprising increase in revenue for the latest quarter, driven by
growth in markets outside North America.
Revenue at the Houston-based company rose to $8.54 billion from
$8.5 billion. Analysts polled by FactSet were expecting a similar
number from a year earlier. Shares rose 1.4% to $32.44 in midday
trading.
Schlumberger Chief Executive Olivier Le Peuch said the company
continues to review its U.S. onshore business and that all options
are available for its fracking unit. Revenue in North America
slumped 11% as production was hurt by a reduction in drilling and
fracking.
"[T]his quarter's results reflected a macro environment of
slowing production growth rate in North America land as operators
maintained capital discipline, reducing drilling and frack
activity," he said.
Mr. Le Peuch said he expects shale drilling in the U.S. to slow
this year and next because of budget constraints.
"The U.S. production growth rate has declined for the last eight
months and is expected to decline further in 2020," he said on the
company's earnings call Friday.
Schlumberger's segment including Europe, Africa and Russia
posted revenue growth of 13%, while revenue for Latin America and
the Middle East and Asia segments increased by single-digit
percentages.
"Outside of a recession, the prospect for international activity
growth remains firmly in place," Mr. Le Peuch said.
The company reported a loss for the third quarter of $11.38
billion, or $8.22 a share, compared with a profit of $644 million,
or 46 cents a share, a year earlier. Excluding charges and credits,
earnings were 43 cents a share, compared with 46 cents a share in
the prior year. Analysts were expecting adjusted earnings of 40
cents a share.
Schlumberger's loss was due to $12.7 billion in pretax charges,
as slumping market conditions forced the company to log two big
write-downs related to a pair of acquisitions.
Schlumberger booked an $8.8 billion goodwill impairment, mostly
linked to its $12.7 billion acquisition of Cameron International
Corp. in 2016 and its $11 billion takeover of Smith International
Inc. in 2010. The company also recorded a $1.1 billion intangible
asset impairment, with the lion's share tied to the Smith deal, and
a $1.6 billion charge it said was related to its pressure-pumping
business in North America.
Schlumberger said in September it was expecting to record
material noncash impairment charges relating to goodwill and
various assets but couldn't determine the amount or range of
amounts of the charges.
--
Christopher M. Matthews
contributed to this article.
(END) Dow Jones Newswires
October 18, 2019 13:48 ET (17:48 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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