Schlumberger profit up on international strength
HOUSTON (AP) — Schlumberger's exposure to global markets separated it from the pack as the world's biggest oilfield service company posted a 10 percent jump in net income during the third quarter.
Like rivals Halliburton and Baker Hughes, Schlumberger's domestic operations were weighed down by decade-low prices for natural gas in North America and the falling number of active rigs. In Europe and Africa, however, net income before taxes rose 9 percent. It rose 13 percent in Asia and the Middle East.
"Our third-quarter results reflected steady international growth," said CEO Paal Kibsgaard.
The company maintains headquarters in Houston and Dubai.
Baker Hughes also reported earnings Friday. Weakness in North America drove net income down by 61 percent. Halliburton on Wednesday said net income tumbled 12 percent because of weak domestic operations.
Schlumberger earned $1.42 billion, or $1.07 per share, compared with $1.3 billion, or 96 cents per share, a year ago. Profits have now risen for three consecutive quarters, and revenue jumped 11 percent to $10.61 billion in the most recent three months.
Both figures topped Wall Street expectations but analysts who have seen headwinds growing for the industry have been lowering their expectations for the sector.
Analysts with Jefferies & Co. pointed out Friday that that Schlumberger would not have beat projections that were being put out as recently as late last month.
And industry watchers have been lowering their estimates going forward, too. In fact, per-share estimates for the fourth quarter have fallen 8 cents in just the past three months.
Economic trouble in Europe and Asia could drive down profits for major oil companies and, in turn, hit oilfield services companies like Schlumberger.
International Energy Agency earlier this month issued a new report predicting slower growth in demand for oil over the next five years, citing the sluggish global economy.
Schlumberger said Friday that it expects international activity to grow more than 10 percent this year. But in North America, the company forecasts weakness in several key areas including the Gulf of Mexico will continue.
Shares of Schlumberger Ltd. rose 70 cents to $75.50 before the markets opened.