Jan 21 (Reuters) - Schlumberger Ltd, the world's No.1 oilfield services provider, unveiled a $10 billion share buyback program and reported a slightly better-than-expected quarterly profit as it cut costs to weather a prolonged slump in oil prices.
Schlumberger's shares rose nearly 2 percent to $62.50 in extended trading.
The company, whose comments are closely watched for an insight into the oil industry, disclosed on Thursday that it cut 10,000 jobs in the fourth quarter.
The company has cut 34,000 jobs, or 26 percent of its workforce, since November 2014, spokesman Joao Felix said.
Schlumberger's cost of revenue fell 35 percent in the three months ended Dec. 31.
"Cost-cutting is clearly what is driving things here, and they are clearly being very aggressive," said Rob Desai, an analyst at Edward Jones.
"For a while the service companies were holding on to excess personnel for the event of a recovery, clearly that's no longer on the table."
Chief Executive Paal Kibsgaard said in a statement there were "no signs of pricing recovery in the short to medium term" in the land market.
Oil and gas companies that use the services provided by Schlumberger and rivals have slashed spending by 50-70 percent in response to persistently weak oil prices.
Oil companies could slash 2016 spending by around 20 percent if oil prices hover at $40, Barclays said in its annual survey of 225 companies worldwide released earlier this month.
Oil futures last traded at about $30 on Thursday.
Kibsgaard said growing demand, supply cuts due to reduced investment and "the size of the annual supply replacement challenge" would help balance oil supply and demand.
The company expects to close its $14.8 billion deal for equipment maker Cameron International Corp in the first quarter, he said.
A current $10-billion share repurchase program, which commenced in the third quarter of 2013, is about to be completed, Schlumberger said.
The net loss attributable to Schlumberger was $1.02 billion, or 81 cents per share, in the fourth quarter, compared with a profit of $302 million, or 23 cents per share, a year earlier.
Excluding restructuring and asset impairment charges of $1.46 per share, profit was 65 cents, above the average analyst estimate of 63 cents, according to Thomson Reuters I/B/E/S.
Revenue fell 39 percent to $7.74 billion, missing the average analyst estimate of $7.78 billion.
Up to Thursday's close of $61.45, the stock had lost about a quarter of its value over the past 12 months.
(Reporting by Swetha Gopinath in Bengaluru; Editing by Don Sebastian)
Copyright 2016 Thomson Reuters. Click for Restrictions.
WHAT DO YOU THINK?
Click on the button below to add a comment.
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
Most Popular Articles
From the Career Center
Jobs that may interest you