SLB Schlumberger Ltd

By Tess Stynes 

Schlumberger Ltd. said its third-quarter earnings fell 49% as low commodities prices continued to pressure pricing and demand for its services from oil producers.

"The business environment deteriorated further in the third quarter" Chief Executive Paal Kibsgaard said in prepared remarks Thursday.

Shares edged down 0.7% to $75.60 in after-hours trading. They have fallen 15% in the past 12 months.

For the latest quarter, Schlumberger reported that revenue in North America dropped 47%. For its operations outside North America, revenue fell 27%.

Mr. Kibsgaard said previous cost-cutting initiatives and the company's transformation program enabled Schlumberger to protect its financial performance "in what is shaping up to be the most severe downturn in the industry for decades."

Overall, Schlumberger reported a profit of $989 million, or 78 cents a share, down from $1.95 billion, or $1.49 a share, a year earlier. Revenue slumped 33% to $8.47 billion.

Analysts polled by Thomson Reuters expected per-share profit of 77 cents and revenue of $8.55 billion.

Schlumberger is the first major U.S. oil-services company to report its results for the third quarter. Halliburton Co. and Baker Hughes Inc., competitors who are set to merge, report on Monday and Wednesday, respectively.

Weak oil prices and the pullback in drilling activity have led to consolidation in the sector, such as Halliburton's pending $35 billion deal for Baker Hughes.

During August, Schlumberger reached a cash-and-stock deal for joint-venture partner Cameron International Corp., initially valued at roughly $12.7 billion. The pair has had a joint venture, OneSubsea, for two years.

Mr. Kibsgaard said the oil-field services outlook for the coming quarters looks increasingly challenging, with activity expected to be reduced further, as lack of available cash flow exhausts capital spending for a number of customers, leading them to take a conservative view on exploration-and-production spending next year despite any gradual improvement in oil prices.

For its part, Schlumberger still aims to strike a balance between market share and operating margins, while continuing to seek opportunities to extend its portfolio through targeted mergers and acquisitions, he added.

Write to Tess Stynes at tess.stynes@wsj.com

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(END) Dow Jones Newswires

October 15, 2015 17:00 ET (21:00 GMT)

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