(Adds analyst comments, updates share prices)
DOW JONES NEWSWIRES
Schlumberger Ltd.'s (SLB) fourth-quarter earnings rose 31% as
the oil-field services company benefited from a rebound in North
American drilling and its Smith International Inc. acquisition.
The results beat analysts' expectations and shares were up 2.73%
at $87.61 in recent premarket trading. The stock through Thursday's
close is up 25% in the past year.
The company's board also approved a 19% increase in its
quarterly dividend. The dividend of 25 cents a share is expected to
cost an additional $55.2 million a quarter.
"For oil, 2010 turned out to be the year of the second-largest
demand increase in the last 30 years. The consensus forecast for
demand in 2011 shows a further healthy increase" Chairman and Chief
Executive Andrew Gould said. "For natural gas, demand recovery has
been less marked."
The company's performance has been boosted by its $11 billion
acquisition of Smith International Inc. in August as well as a rush
for North American shale oil and gas. Strength in those areas has
been offsetting softness in its international and deep-water
businesses. Still, major oil companies' increased focus on
deep-water projects and exploration may benefit Schlumberger, whose
operations are more focused internationally than many of its
rivals.
Schlumberger reported a profit of $1.04 billion, or 76 cents a
share, up from $795 million, or 65 cents a share, a year earlier.
Excluding restructuring and merger-related expenses, earnings from
continuing operations rose to 85 cents from 67 cents. Revenue
soared 58% to $9.07 billion, after dropping 17% a year earlier.
Analysts polled by Thomson Reuters most recently forecast
earnings of 77 cents on revenue of $8.7 billion.
Simmons & Co. analyst Bill Herbert said Wall Street "should
like this result as estimates will likely move higher driven by a
combo of better than expected results and a supportive
outlook."
Gross margin fell to 20.64% from 23.4%.
The acquired Smith businesses contributed revenue of $2.49
billion and earnings of $275 million.
The company, with headquarters in Houston, Paris and the Hague,
also said it repurchased 6.1 million shares for a total price of
$449 million during the quarter.
"With its under-leveraged balance sheet and our substantial free
cash flow estimates over the next two years, we expect Schlumberger
to return increasing amounts to shareholders through share
repurchases," analysts with Wells Fargo Securities wrote in a
client note.
-By Tess Stynes, Dow Jones Newswires; 212-416-2481;
Tess.Stynes@dowjones.com
-Ryan Dezember contributed to this article.