Schlumberger profit beats as international gains offset weak North America

FAN Editor
The exterior of a Schlumberger Corporation building is pictured in West Houston
FILE PHOTO: The exterior of a Schlumberger Corporation building is pictured in West Houston January 16, 2015. REUTERS/Richard Carson/File Photo

October 18, 2019

(Reuters) – Schlumberger NV <SLB.N> beat Wall Street estimates for quarterly profit on Friday, as higher drilling activity in international markets boosted demand for its equipment and services and offset weakness in North America.

The international markets have been a bright spot for the oilfields service provider since last year as investor pressure to boost returns has forced North American oil and gas producers to spend less on drilling new oil wells.

This is the first report under Olivier Le Peuch, who took over as CEO from Paal Kibsgaard in July. He has vowed to review the company’s North American portfolio and restructure some other units and exit unprofitable businesses.

Schlumberger, an industry bellwether, said revenue from its international business rose 8% to $5.63 billion in the third quarter, while revenue from North America fell 11% to $2.85 billion.

The company reported a net loss of $11.38 billion, compared with a net profit of $644 million a year earlier, hit by a goodwill impairment charge of $12.7 billion.

Le Peuch had already prepared investors for the charge, saying it would be “significant” when he delivered his first public remarks last month.

Excluding the charge and other items, the company earned 43 cents per share, beating estimates of 40 cents, according Refinitiv IBES data.

Total revenue was largely unchanged at $8.54 billion, but beat expectation of $8.50 billion.

Shares of the Houston, Texas-based company rose 1.44% to $32.35 before the bell.

(Reporting by Shariq Khan in Bengaluru; Editing by Sriraj Kalluvila)

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