2nd UPDATE: Schlumberger 4Q Net Up 36% As Revenue Rises
20 Janeiro 2012 - 3:40PM
Dow Jones News
Schlumberger Ltd. (SLB) on Friday said fourth-quarter earnings
rose 36%, beating Wall Street expectations as a global drilling
frenzy continued despite fears about the global economy.
The world's largest oilfield services company posted a profit of
$1.41 billion, or $1.05 a share, up from $1.04 billion, or 76 cents
a share, a year earlier. Excluding merger and integration costs and
the write-off of assets in Libya, earnings from continuing
operations rose to $1.11 a share from 85 cents a year earlier.
Analysts polled by Thomson Reuters had forecast earnings of $1.09 a
share.
The results indicate strong oil-related activity in areas like
the deep-water U.S. Gulf of Mexico and Latin America, and also
reflect continued drilling in onshore North America, as producers
shift from low-profit natural-gas-producing wells toward
unconventional oil plays. Schlumberger's earnings prove that the
North American oilpatch is "showing resilience" despite cratering
prices for natural gas, and "should have positive read-throughs"
for Schlumberger's peers, said Nigel Browne, an analyst with
Macquarie. Schlumberger's rivals Halliburton (HAL) and Baker Hughes
Inc (BHI), which report Monday and Tuesday, respectively, have
played a large role in the resurgence of the North American
oilpatch thanks to the implementation of horizontal drilling and
hydraulic fracturing techniques.
Schlumberger executives said oil consumption and oil field
activity will continue to grow through 2012, driven by relatively
high energy prices and large oil companies' need to expand their
reserves, despite uncertainty surrounding economic recovery in the
U.S. and Europe. "Absent a global recession, we do not expect [oil]
prices to weaken significantly," Chief Executive Paal Kibsgaard
said in a conference call.
But natural gas prices, which have fallen to 10-year lows around
$2.322 a million British thermal units thanks to a combination of
oversupply and lackluster demand, are making prices for
gas-directed pressure pumping services weaken, Schlumberger
executives said. Schlumberger said it was "building the required
flexibility" in its spending plans, but that it expects any
reductions in global oilfield activity due to global economic
concerns to be "short-lived."
The company is budgeting $4.5 billion in capital expenditures
for 2012, up from $4 billion in 2011.
Schlumberger's North American revenue more than doubled from a
year earlier, led by high-technology services in the deep-water
Gulf of Mexico, where activity has resumed.
But the company's international performance also has been
improving. Schlumberger resumed operating in Libya during the
fourth quarter, since the country's civil war succeeded in toppling
Moammar Gadhafi as its leader. However, it took a $60 million
charge from assets lost during the strife, Chief Financial Officer
Simon Ayat said in a conference call.
The company also continues to sell services in Mexico and to
provide technology for shale rock formation drilling in
Argentina.
Shares recently were up 1% to $73.58.
Schlumberger has headquarters in Paris, Houston, and The
Hague.
-By Angel Gonzalez, Dow Jones Newswires; 713-547-9214;
angel.gonzalez@dowjones.com
--Nathalie Tadena contributed to this article.
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