July 22 (Bloomberg) -- Schlumberger Ltd., the world’s largest oilfield-services provider, said second-quarter profit rose 64 percent as increasing crude prices drove more U.S. onshore drilling.
Net income rose to $1.34 billion, or 98 cents a share, from $818 million, or 68 cents, a year earlier, Schlumberger, based in Houston and Paris, said in a statement today. Excluding a gain from selling a business unit and merger costs, the company earned 2 cents a share more than the average of 33 analysts’ estimates compiled by Bloomberg. Sales climbed 62 percent to $9.62 billion.
The average number of active oil and gas rigs around the world rose to 3,163 in the second quarter, up 15 percent from 2,762 a year earlier, according to Baker Hughes Inc. Crude prices on the New York Mercantile Exchange averaged $102.34 a barrel in the quarter, a 31 percent gain from the $78.05 average a year earlier.
“Relative to last year, they’ve had huge revenue growth,” Scott Burk, an analyst at Canaccord Genuity in New York, who rates the shares a “hold” and owns none, said before the earnings were released. “They’ve seen margin contraction internationally while margins have actually risen pretty dramatically in the U.S.”
The company said bad weather in the northwestern U.S. and Canada was offset by increased drilling on land and in deep waters, including renewed interest in the Gulf of Mexico.
“The continued strength in drilling liquid-rich plays in North America, coupled with an acceleration in drilling both in exploration and development internationally, will put considerable strain on the ability of the service industry to meet activity levels,” Andrew Gould, Schlumberger’s chief executive officer, said in the statement.
Gould, 64, will retire Aug. 1 and be replaced by Chief Operating Officer Paal Kibsgaard, 44, the company said yesterday.
The earnings statement was released before the start of regular trading on U.S. markets. Schlumberger rose 4 cents to $91 at 6:18 a.m. in New York. The shares, which have 33 buy and six hold ratings from analysts, have risen 8.9 percent this year.
(Schlumberger will hold an earnings conference call starting at 9 a.m. New York time accessible at EVTS .)
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