Rising demand for more advanced oilfield technology to tap hard-to-reach crude around the world spurred a record first-quarter profit for Schlumberger Ltd. (SLB)
Net income climbed to $1.59 billion, or $1.21 a share, from $1.26 billion, or 94 cents, a year earlier, Houston- and Paris-based Schlumberger said today in a statement. Excluding one-time items, the earnings compared with the $1.20 average of 34 analysts’ estimates compiled by Bloomberg. Sales climbed 6.3 percent to $11.2 billion.
Chief Executive Officer Paal Kibsgaard is pushing new patents and technology at the largest oilfield-services provider to help companies increase production more cheaply. Customers boosted oilfield spending fivefold in the past decade, while output grew only 15 percent. Producers are likely to increase capital spending 6 percent this year to a record $723 billion, according to Barclays Capital.
“They are growing faster as technology matters more and more in this world,” James Wicklund, an analyst at Credit Suisse Group AG in Dallas, who rates Schlumberger’s shares a buy and owns none, said in a phone interview before the results were released.
Schlumberger’s services include mapping where pockets of oil sit under the earth’s surface and completing wells with hydraulic fracturing, which blasts water, sand and chemicals underground to free trapped hydrocarbons.
Its portfolio of U.S. patents has more than doubled in the past nine years, while investment in research and engineering climbed 10 percent last year to $1.17 billion from $1.06 billion in 2011. New technologies include HiWay, which creates pathways in the fracture networks, and a more advanced diamond-cutter drill bit known as the Stinger.
The average number of rigs active around the world rose 6.1 percent to 3,644 in the quarter from 3,436 a year earlier, according to Baker Hughes Inc.
The statement was released before the start of regular trading in New York. Schlumberger, which has 37 buy and three hold recommendations from analysts, rose 0.8 percent to $100.94 yesterday.
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