Schlumberger Ltd. (SLB:US), the world’s largest oilfield-services provider, fell the most in more than a year after saying it expects earnings per share to fall because of delays and slowing activity in its two largest (SLB:US) regional units.
Schlumberger fell 5 percent to $68.91 at the close in New York, the biggest drop since Sept. 22, 2011.
Earnings per share are expected to fall by 5 to 7 cents in the fourth quarter because of contractual delays in Europe, Africa and the Commonwealth of Independent States and weaker than expected drilling onshore U.S. and in western Canada, the Houston and Paris-based company said today in a statement.
“The issues in Europe/CIS/Africa are more surprising,” Scott Gruber, an analyst at Sanford Bernstein in New York, wrote today in a note to investors. “This is likely impacting the stock more than North America.”
Before today’s announcement, analysts expected Schlumberger to report an average $1.14 a share, after one-time items, according to 31 estimates compiled by Bloomberg.
The region that includes Europe and Africa generated the second-highest regional sales with $2.99 billion in the third quarter. Revenue there was “partially” lower due to local delays and rig start-ups in North Africa, the company said Oct. 19 when it announced third-quarter results.
“Contractual delays in this region are not uncommon and can be severely dilutive to margins,” Charles Minervino, an analyst at Susquehanna Financial Group, wrote in a note to investors.
The U.S. and Canada unit generated the most sales at $3.29 billion in the third quarter. The number of rigs active onshore in the U.S. has fallen 2.8 percent since the end of the third quarter, according to Baker Hughes Inc. (BHI:US)
Schlumberger, which climbed 6.2 percent this year before today, has scheduled a conference call to discuss earnings on Jan. 18 at 9 a.m. New York time. The shares have 35 buys and 4 hold ratings from analysts, according to data compiled by Bloomberg.
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