Schlumberger Rolled in 2009 Revenue of $22.7B

Schlumberger reported full-year 2009 revenue of $22.70 billion versus $27.16 billion in 2008.

Income from continuing operations attributable to Schlumberger, excluding charges, was $3.36 billion, representing diluted earnings-per-share of $2.78 versus $4.50 in 2008. Income from continuing operations attributable to Schlumberger, including charges, was $3.16 billion, representing diluted earnings-per-share of $2.61 versus $4.42 in 2008.

Fourth-Quarter Results

Fourth-quarter revenue was $5.74 billion versus $5.43 billion in the third quarter of 2009, and $6.87 billion in the fourth quarter of 2008.

Income from continuing operations attributable to Schlumberger was $817 million—an increase of 4% sequentially, but 34% lower year-on-year excluding $93 million of charges in the fourth quarter of 2008. Diluted earnings-per-share from continuing operations attributable to Schlumberger was $0.67 versus $0.65 in the previous quarter, and $1.03 excluding $0.08 of charges in the fourth quarter of 2008.

Oilfield Services revenue of $5.17 billion was up 4% sequentially but down 17% year-on-year. Pretax segment operating income of $1.01 billion was down 3% sequentially and 37% year-on-year.

WesternGeco revenue of $549 million was up 19% sequentially but down 8% year-on-year. Pretax segment operating income of $115 million was up 89% sequentially and 30% year-on-year.

Schlumberger Chairman and CEO Andrew Gould commented, "Fourth-quarter revenue increased sequentially in the North America, Latin America and Middle East and Asia Areas as offshore revenue quality improved with increasing deepwater rig count while software and product sales saw the usual fourth-quarter strength. Europe/CIS/Africa was flat with the previous quarter as stronger offshore activity and year-end software and product sales in the Area were not sufficient to offset the seasonal decline in Russia. Overall, sequential margins were particularly affected by three events -- a changed revenue mix in Canada; seasonal weakness in Russia; and reduced activity coupled with a less favorable revenue mix in the Mexico/Central America GeoMarket. Margins were also impacted by pricing concessions made earlier in the year.

"WesternGeco achieved highly satisfactory fourth-quarter Multiclient revenues due largely to wide-azimuth survey sales in the US Gulf of Mexico.

"Our outlook for 2010 remains largely dependent on the prospects for the general economy. At the end of the third quarter, we indicated that we were encouraged that signs were emerging that demand for oil and gas would begin to increase. Consensus forecasts predict that oil demand in 2010 will increase, particularly in the developing world, for the first time since 2007.

"As a result, we feel that oil prices are likely to be sustained at current levels and that as our customers' confidence grows, their exploration and production budgets will increase. We feel that considerable leverage to increase investment exists in offshore markets, in Russia, as well as in certain emerging opportunities such as Iraq. These events will be dependent on continued increases in economic growth in the second half of the year beyond the current government stimulus packages.

"For natural gas activity we remain a great deal more cautious. Despite signs of some recovery in industrial demand and the impact of the recent cold weather, we consider that markets remain generally oversupplied. Increased flows of LNG -- with additional capacity being added in 2010 -- as well as the general uncertainty over the decline rates of unconventional gas production have the potential to limit the current increase in the North American gas drilling rig count.

"We anticipate that 2010 will be a better year for multiclient seismic sales and for land seismic activity particularly in Middle East and North Africa. While marine activity will be reasonably robust, pricing improvements will be limited due to continued new capacity additions.

"Longer term we remain confident that considerably increased spending will be necessary to maintain sufficient reserves and production of hydrocarbons to meet the world’s needs. Our technology portfolio and worldwide infrastructure mean we are strongly positioned to capture growth opportunities as our customers begin to increase their investment."


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