Schlumberger Hurt By Reduced Drilling, Weak Pricing In Latam
Schlumberger reports a profit that beat analysts' estimates, but revenue fell short of expectations due to reduced drilling and pricing pressure in Latin America.
April 17 (Reuters) - Schlumberger Ltd, the world's largest oilfield services company, reported a profit that beat analysts' estimates for the tenth straight quarter, but revenue fell short of expectations due to reduced drilling and pricing pressure in Latin America.
Schlumberger's revenue from Latin America fell "mainly due to significantly lower activity and pricing in Brazil, coupled with reduced rig count in Mexico due to budgetary spend," the company said in a statement on Thursday.
Revenue from the region declined 8 percent to $1.76 billion, the lowest in eight quarters. Latin America accounted for nearly 16 percent of Schlumberger's total sales in the first quarter ended March 31.
The company gets almost 70 percent of its revenue from outside North America and is less exposed to the region than rivals Halliburton Co and Baker Hughes Inc.
Baker Hughes, the world's third-largest oilfield services company, also posted a 10 percent drop in quarterly revenue from Latin America, but its profit widely beat estimates as North America margins improved.
In the past couple of quarters, colder-than-usual weather in North America and Russia has disrupted drilling, hurting oil and gas companies.
However, the cold weather has pushed up natural gas prices and depleted stockpiles to their lowest level since 2003, after years of a glut that forced many drillers to idle rigs.
Schlumberger Chief Executive Paal Kibsgaard said the fundamentals of the global economic recovery were intact despite the harsh winter, slowing growth in China, and problems in Ukraine.
"These factors, however, are likely temporary in nature and the oil markets continue to be tighter than once anticipated ... natural gas trends were boosted by winter temperatures, but supply and demand is expected to normalize over the coming months," he said in a statement.
Schlumberger's revenue from North America rose 12 percent in the quarter even as pretax operating margin dipped 53 basis points mainly due to weak pricing for its pressure pumping services used in onshore drilling, and drilling delays in the Gulf of Mexico.
Revenue from the Middle East and Asia rose 19 percent.
The company's total revenue rose about 6 percent to $11.24 billion, but missed the average analyst estimate of $11.49 billion, according to Thomson Reuters I/B/E/S.
Copyright 2014 Thomson Reuters. Click for Restrictions.
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