Schlumberger Profit Rises as Customers Boost International Work

Schlumberger Ltd. (SLB), the world’s largest oilfield-services provider, said third-quarter profit rose as higher crude prices led to more drilling worldwide.

Net income climbed to $1.7 billion, or $1.29 a share, from $1.4 billion, or $1.07, a year earlier, Houston- and Paris-based Schlumberger said in a statement on Business Wire today. Excluding one-time items, the company exceeded the $1.24 per share average of 31 analysts’ estimates compiled by Bloomberg.

The quarterly average price for Brent oil, an international benchmark, has remained above $100 a barrel since the start of 2011, according to data compiled by Bloomberg. Schlumberger generates about two-thirds of sales outside of North America, the highest ratio among the largest service providers, including Halliburton Co. (HAL) and Baker Hughes Inc. (BHI)

“If you look at the entire world today, the weakest part of the oilfield market is U.S. completions,” James Wicklund, an analyst at Credit Suisse Group AG in Dallas, who rates the shares the equivalent of a hold and owns none, said in a phone interview before the earnings were announced. “If you have the least amount of U.S. completions, you do better.”

This is expected to be the fourth consecutive year of “double-digit” spending increases by customers for exploration and production work around the world, Chief Executive Officer Paal Kibsgaard told analysts and investors July 19. The spending gains will be most marked in the Middle East and in Asia, he said. In Brazil, Schlumberger is starting several projects in the second half of the year, he said.

Schlumberger’s services include completing wells with hydraulic fracturing work, which blasts water, sand and chemicals underground to free trapped hydrocarbons.

The average number of rigs active around the world rose 0.9 percent to 3,403 in the quarter from 3,372 a year earlier, according to Baker Hughes.

The earnings statement was released before the start of regular trading on U.S. markets. Schlumberger, which has 31 buy, four hold and one sell recommendation from analysts, fell 0.8 percent to $91.43 yesterday in New York.

(Schlumberger will hold an earnings conference call at 9 a.m. New York time, accessible at {EVTS }.)

To contact the reporter on this story: David Wethe in Houston at

To contact the editor responsible for this story: Susan Warren at

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