Schlumberger 3Q Net Rises As Sales Offset Margin Declines
Last update: 10/17/2008 6:41:41 AM
DOW JONES NEWSWIRES
Schlumberger Ltd.'s (SLB) third-quarter net income climbed 13% as sales rose, though margins declined amid interruptions from the hurricane season in the Gulf of Mexico and a slowdown in Alaska.
Chairman and Chief Executive Andrew Gould said the recent rapid deterioration in credit markets "will undoubtedly have an effect" on our global production and exploration, though the company expects it will largely be limited to North America and some emerging markets. He also cited the strengthening production of North American natural gas that has also led a number of customers to reduce spending early.
Schlumberger - the first oilfield service company to report and the largest by market capitalization - reported net income of $1.53 billion, or $1.25 a share, up from $1.35 billion, or $1.09 a share, a year earlier.
Revenue increased 22% to $7.26 billion for the company, which serves the oil and gas industries.
Analysts' latest estimates were for earnings of $1.25 a share on revenue of $7.02 billion, according to Thomson Reuters.
Operating margins slipped to 26.7% from 29.4%.
Gould said it is too soon to predict the company's overall activity for 2009, adding, "We anticipate a slowing in the rate of increase of customer spending. The company's previous positive outlooks have always been tempered by the caveat that a severe global recession could slow the rate of increase in worldwide exploration and production spending, he said.
Oilfield services revenue, which comprises the bulk of Schlumberger's business, increased 24% though earnings were flat as hurricane damage in the U.S. offset stronger demand in Canada.
North American revenue rose 15%, while earnings fell 8% amid reduced activity due to Hurricanes Gustav and Ike. The company fared better outside of North America with international operations postingdouble-digit profit gains in each region, led by Europe and Africa. Revenue was up at least 22% in each region, with Latin America posting the biggest gain.
Wall Street also has taken a cautious outlook on the oilfield-services sector, with Calyon Securities lowering earnings estimates.
Shares closed Thursday's session at $53.20, and there was no premarket activity.
-By Shirleen Dorman, Dow Jones Newswires; 201-938-2310; shirleen.dorman@dowjones.com |
