Schlumberger Second Quarter Earnings Rise

Oilfield service company Schlumberger Ltd. reported Friday second quarter 2013 revenue of $11.1 billion, up 6 percent from $10.6 billion in first quarter 2013 and 8 percent higher than the $10.3 billion in revenue seen in second quarter 2012, thanks to revenue growth in its international and North America businesses.

The company’s income from continuing operations excluding charges and credits was $1.54 billion, up 19 percent from the previous quarter and 14 percent higher than second quarter 2012 income.

“Strong Schlumberger second quarter results were marked by significantly higher international activity, both offshore and in key land markets,” said Schlumberger CEO Paal Kibsgaard in a July 19 press release. “In North America, we benefited from solid execution on land and further strength in deepwater activity to achieve solid overall progress despite land pricing and the effects of the Western Canada spring break-up.”

Schlumberger saw double-digit revenue growth in its Reservoir Characterization Group and its Middle East & Asia and Europe/CIS/Africa regions. The company’s Middle East & Asia region led international results as exploration and drilling activity rebounded in China and Australia, growth continued in Saudi Arabia and Iraq and land and marine seismic activity showed further progress. The company’s Latin America operations saw growth in Integrated Project Management activity, but this growth was offset by seasonal seismic vessel transits.

The United States has shown virtually no impact from the financial sequester, the Eurozone remains in recession, and China data continued to be mixed, Kibsgaard noted, adding that oil and gas supply and demand and prices remain stable. But the company continues to see consistent growth as exploration and production spending has been revised upwards, making 2013 the fourth consecutive year of double-digit spending increases and pointing to the long-term nature of oil and gas developments.

Despite a disappointing top line in its Latin America operations, Schlumberger’s quarterly margins beat GHS Research analysts’ expectations, with operating margins reaching or exceeding 20 percent across all regions.

“Outside of that, all other segments were either in line or beat our expectations, implying that our out year estimates need to increase,” according to a July 19 GHS Research analyst note.


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