Schlumberger Widens 3Q Profit But Warns of Softness in the Gulf

Schlumberger (NYSE:SLB) reveled a stronger-than-expected 9.5% increase in third-quarter earnings on Friday as drilling activity overseas ramped up and helped offset softening profits in North America.

The world’s largest oilfield services company posted net income of $1.42 billion, or $1.07 a share. Excluding one-time charges, Schlumberger said it earned $1.08 a share, topping average analyst estimates in a Thomson Reuters poll by two cents.

Revenue climbed 11% to $10.61 billion, narrowly below the Street’s $10.68 billion.

“Key markets, both on land and offshore, continued to drive performance as international demand for reservoir characterization and drilling services more than offset weakness in the North America pressure pumping market,” Schlumberger CEO Paal Kibsgaard said in a statement.

In the Middle East and Asia, as well as in Europe and Africa, stronger results quarter-over-quarter were led by higher prices and growing demand.

However, flat Latin America revenues from the previous quarter, a slow seasonal recovery in Canada as well as falling U.S. land rig count and the effects of Hurricane Isaac all impacted North American operations.

Schlumberger said there continues to be uncertainty surrounding the outlook for the global economy and expects Gulf of Mexico activity to be challenged by weaknesses in the land hydraulic fracturing market.

However it’s still anticipating more than 10% growth this year in international activity.

Shares of Schlumberger ticked slightly lower on Friday to $74.38.