Schlumberger Profit Rises as Price Gains Offset Spill
Schlumberger Ltd. chief executive officer Andrew Gould. Photographer: Alexander Zemlianichenko Jr/Bloomberg
Schlumberger Ltd., the world’s largest oilfield-services provider, said second-quarter profit climbed 33 percent as gains in crude prices spurred increased exploration and production spending by customers.
Net income rose to $818 million, or 68 cents a share, from $613 million, or 51 cents, a year earlier, Schlumberger, based in Houston and Paris, said today in a statement. Profit matched the average of 30 analyst estimates compiled by Bloomberg.
Revenue advanced 7.4 percent to $5.94 billion as increasing work on U.S. onshore and Latin American projects made up for a moratorium on deep-water Gulf of Mexico drilling permits. The company expects a “continued slow build” in services demand around the world in this year’s second half, Chief Executive Officer Andrew Gould said in the statement.
“Their outlook remains positive but measured,” said Dan Pickering, an analyst at Tudor Pickering Holt & Co. in Houston whose firm has a “buy” rating on Schlumberger shares. “In other words, business isn’t exploding to the upside but kind of grinding higher.”
Schlumberger’s French shares rose 0.3 percent to 47.25 euros at 12:50 p.m. in Paris. The company’s U.S. stock has dropped 9.7 percent since the April 20 rig explosion that led to the Gulf of Mexico oil spill.
Spending Seen Rising
Exploration and production spending by oil companies will rise 12 percent this year, even as the permit ban triggered by BP Plc’s record U.S. oil spill slows drilling in the Gulf, Barclays Capital estimated last month.
Oil futures in New York averaged $78.05 a barrel in the second quarter, 31 percent higher than a year earlier.
Halliburton Co., the world’s second-largest oilfield contractor, said July 19 that its second-quarter profit surged 83 percent as gains in onshore drilling more than made up for the business slowdown in the Gulf.
Schlumberger agreed in February to buy Houston-based Smith International Inc., which is a partner with the company in the M-I Swaco drilling-fluids joint venture. The companies certified this month that they are in “substantial compliance” with a second request for information on the deal from the U.S. government.
To contact the reporter on this story: Edward Klump in Houston at eklump@bloomberg.net.
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