Schlumberger Reels-In 3Q Revenue of $7.26B, Up from 2007
Schlumberger has reported third-quarter revenue of $7.26 billion versus $6.75 billion in the second quarter of 2008, and $5.93 billion in the third quarter of 2007.
Net income was $1.53 billion -- an increase of 7% sequentially and 13% year-on-year. Diluted earnings-per-share was $1.25 versus $1.16 in the previous quarter, and $1.09 in the third quarter of 2007.
Oilfield Services revenue of $6.36 billion increased 5% sequentially and 24% year-on-year. Pretax segment operating income of $1.70 billion was flat sequentially but increased 13% year-on-year.
WesternGeco revenue of $892 million increased 33% sequentially and 12% year-on-year. Pretax segment operating income of $355 million increased 81% sequentially and 16% year-on-year.
Schlumberger Chairman and CEO Andrew Gould commented, "A strong continuation in sequential revenue growth in the third quarter was led by further strengthening of gas drilling activity on land in the US and Canada, a very active summer drilling season in Russia and continued growth of IPM activity in Latin America. Margin performance was generally satisfactory apart from the heavy impact of the hurricane season on North America and higher than usual third-party managed services revenue at low margins in Latin America, due in part to the start up of the Burgos 7 contract.
"WesternGeco reported excellent Marine results and a strong recovery in multi-client sales revenues.
"As we enter the fourth quarter, the recent rapid deterioration in credit markets will undoubtedly have an effect on our activity though we anticipate this will largely be limited to North America and in some emerging exploration markets overseas. The strengthening production of North American natural gas has also led a number of customers to reduce spending early.
"At the present time, the rate at which the world economy will slow has become increasingly uncertain. We have always maintained that the one event that could slow the rate of increase in worldwide exploration and production spending would be a reduction in the demand for oil caused by a severe global recession. At the moment, it is still too soon to predict to what extent current events will affect overall activity in 2009, but we anticipate a slowing in the rate of increase of customer spending.
"However, the weakness of the current supply base, the age of the production profile and the decrease in reserve replacement -- all of which we have indicated on many occasions -- are such that any significant drop in exploration and production investment would rapidly provoke an even stronger recovery.
"Schlumberger has an unparalleled technology position, a strong balance sheet, an unmatched global presence and an excellent and highly motivated workforce. I have no doubt we will emerge from the current turmoil even stronger than before."
During the third quarter, Schlumberger repurchased 5.96 million shares of common stock at an average price of $91.45 for a total of $545 million under the $8 billion repurchase program approved by the Board of Directors on April 17, 2008.
The overall impact of the hurricane season on Schlumberger third-quarter earnings was estimated at $0.04 per share. Without this effect, diluted earnings-per-share would have been $1.29.
On August 28, 2008, Sword Canada Acquisition Corp., an acquisition company indirectly and jointly owned by Schlumberger Limited and First Reserve Corporation, completed the purchase of all issued and outstanding common shares of Calgary-based Saxon Energy Services, Inc., a land drilling contractor with significant presence in North and South America.
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