Schlumberger Q1 Profit Tops Views, Shares Gain

Shares of

rose over 2 percent in after-hours trading after the company reported stronger-than-expected earnings for the first quarter. Net income attributable to Schlumberger slipped to $975 million, or $0.76 per share, compared to $1.59 billion, or $1.21 per share, in the year-ago period. Excluding non-recurring costs, the company earned $1.06 per share. Its revenue declined around 9 percent year-over-year to $10.25 billion. However, analysts were expecting earnings of $0.91 per share on revenue of $10.46 billion. North America revenue slipped 25 percent sequentially to $3.2 billion in the latest quarter, while revenue for the International Areas fell 16 percent sequentially to $6.9 billion. Production Group revenue fell 22 percent sequentially to $3.8 billion, while Drilling Group revenue dropped 15 percent sequentially to $4.0 billion. Reservoir Characterization Group revenue tumbled 21 percent sequentially to $2.6 billion. During the quarter, the company repurchased 8.7 million shares of its common stock at an average price of $82.98 per share. The average estimate among 37 Estimize users was for earnings of $1.02 per share and revenue of $10.72 billion. Schlumberger Chairman and CEO Paal Kibsgaard said, "Schlumberger first-quarter revenue decreased 19% sequentially driven by the severe decline in North American land activity and associated pricing pressure. International operations were impacted by reduced customer spend in addition to seasonal effects in the Northern Hemisphere and the fall in value of the Russian ruble and the Venezuelan bolivar. Three-quarters of the overall sequential decline was due to lower activity and pricing, while the remainder was the result of currency effects and non-recurring year-end sales." The executive added, "In spite of the detailed preparations we made in the fourth quarter, the abruptness of the fall in activity, particularly in North America, required us to take additional actions during the quarter. These included the difficult decision to make a further reduction in our workforce of 11,000 employees, leading to a total reduction of about 15% compared to the peak of the third quarter of 2014." Schlumberger shares rose 2.74 percent to $94.41 in the after-hours trading session.