Schlumberger Beats Estimates as Cost Cuts Cushion Weak Activity

EarningsReuters

Schlumberger Ltd, the world's No.1 oilfield services provider, reported a marginally better-than-expected quarterly profit, as deep cost cuts and efficiency improvements helped cushion the impact of weak North American drilling activity.

With crude prices remaining under pressure, analysts and industry experts expect any pickup in U.S. drilling activity to be delayed until next year, with pricing recovery taking even longer.

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That view was expressed by Schlumberger Chief Executive Paal Kibsgaard in September and reiterated on Thursday.

"As we enter the last quarter of the year, the oil market is still weighed down by fears of reduced growth in Chinese demand and the expectations regarding the timing and magnitude of additional Iranian supply," Kibsgaard said in a statement.

Schlumberger, which is less exposed to North America than rivals Baker Hughes Inc and Halliburton Co, said revenue from the region fell nearly 47 percent in the third quarter ended Sept. 30.

Revenue from outside North America, which accounted for nearly three quarters of the total revenue, fell about 27 percent.

Schlumberger has cut 20,000 jobs this year and scaled back spending in response to weak crude prices.

Still net income attributable to the company nearly halved to $989 million, or 78 cents per share. Total revenue fell 33 percent to $8.47 billion.

Analysts on average were expecting a profit of 77 cents per share on revenue of $8.55 billion, according to Thomson Reuters I/B/E/S.

Schlumberger shares were down 0.4 percent at $75.88 in extended trading.

(Reporting by Amrutha Gayathri in Bengaluru; Editing by Savio D'Souza)