Schlumberger Ltd.'s (SLB) fourth-quarter earnings fell 31% amid
continued weak demand and prices, though revenue showed more signs
of demand stabilizing and results exceeded analysts' estimates.
Demand for oilfield services began to stabilize late last year,
though industry leaders held off on calling a bottom amid
uncertainty about the U.S. natural-gas market, where sluggish
demand and abundant supply has been hurting prices.
Chairman and Chief Executive Andrew Gould on Friday said the
company's 2010 outlook remains largely dependent on the economy's
prospects. Gould pointed to analysts' forecasts that oil demand
will rise this year, especially in developing countries, for the
first time since 2007, supporting oil prices. That should lead to
bigger exploration and production budgets.
However, he was more cautious about the outlook for natural gas,
saying that despite a recent uptick in industrial activity and
recent cold weather that the "markets remain generally
oversupplied" and could limit recent rig-count growth in North
America.
Schlumberger reported a profit of $795 million, or 65 cents a
share, down from $1.15 billion, or 95 cents a share, a year
earlier. Revenue decreased 17% to $5.74 billion, but was up 5.7%
from the previous quarter as all the regions in which it operates,
except Europe/CIS/Africa, saw sequential growth.
Analysts polled by Thomson Reuters most recently forecast
earnings of 64 cents on revenue of $5.45 billion.
Gross margin fell to 23.8% from 26.7% amid the revenue decline.
The top line slumped 44% in North America, though it was up 6%
sequentially. However, lower pricing for well service partly offset
sequential drilling growth.
Shares closed Thursday at $68.31 and didn't trade premarket. The
stock is up 6.2% this year.
-By Tess Stynes, Dow Jones Newswires; 212-416-2481;
Tess.Stynes@dowjones.com
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