Schlumberger profit beats as drilling demand surges

Industries Reuters

The exterior of a Schlumberger Corporation building is pictured in West Houston (Reuters)

Schlumberger, the world's largest oilfield services provider, reported better-than-expected quarterly profit and revenue on Friday, as strong demand in North America helped offset weakness in Europe and the Middle East.

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Schlumberger is the first major oilfield services provider to report earnings and is seen as a barometer for the industry's performance.

Oilfield service providers such as Schlumberger and Halliburton, which help explorers locate oil and drill wells, saw a slump in demand after crude oil prices went on a free fall, starting 2014.

However, shale producers in North America have been actively drilling since oil recovered to hover around $50.

Drillers added seven oil rigs in the week to July 7, bringing the total count up to 763. That is the most since April 2015, according to a closely watched Baker Hughes report.

Schlumberger's revenue rose 4.2 percent to $7.46 billion in the second quarter, beating the average analysts' estimate of $7.23 billion, according to Thomson Reuters I/B/E/S.

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Revenue from North America surged nearly 27 percent to $2.20 billion in the three months ended June 30.

Excluding items, the company earned 35 cents per share, above expectation of 30 cents.

The Houston-based company's shares were marginally up at $67.60 in premarket trading on Friday.

(Reporting by Nivedita Bhattacharjee and Yashaswini Swamynathan in Bengaluru; Editing by Sriraj Kalluvila)