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Sclumberger lost $7.4 billion as a “double black swan” event created the industry's most challenging market in decades.
The Houston-based oil services provider took an $8.5 billion pre-tax charge as plunging oil prices forced the company to slash the value of some of its assets and cut its dividend by 75 percent.
On a per-share basis, the loss amounted to $5.32 a share as revenue tumbled 5 percent year-over-year to $7.5 billion. Wall Street analysts surveyed by Refinitiv were expecting revenue of $7.52 billion.
Excluding one-time charges such as the writedowns, Schlumberger earned 25 cents, topping estimates of 24 cents. Shares rallied following the results.
“The unprecedented global health and economic crisis sparked by the COVID-19 pandemic increasingly impacted industry activity during the quarter,” CEO Olivier Le Peuch said in a statement.
“The effect of this was amplified late in the quarter by a new battle for market share between the world’s largest oil producers," he added. "This double black swan event created simultaneous shocks in supply and demand."
A black swan is an unforseen outlier event that has an extreme impact and can be explained after the fact, making it predictable.
Those shocks caused the price of West Texas Intermediate crude oil, the U.S. benchmark, to fall by 67 percent during the first quarter, resulting in a sharp slowdown in spending and drilling activity by Schlumberger's customers.
North American revenue fell 7 percent from the previous quarter to $2.3 billion while international revenue plunged 10 percent to $5.1 billion.
Schlumberger saw "some resilience" from its international business, which posted 2 percent year-on-year growth. The company generated $784 million of cash flow, more than double the amount in the same three months last year.
The company's board of directors cut the dividend by 75 percent to 12.5 cents per share as it tries to conserve cash during the downturn.
Schlumberger shares fell 65 percent this year through Thursday.