A “strong performance” in North America and overseas failed to offset declines in product and software sales for leading oilfield services provider Schlumberger Ltd., which on Friday reported 1Q2010 earnings down 28% from the year-ago period.
CEO Andrew Gould, who led a conference call with financial analysts to discuss Schlumberger’s quarterly performance and its outlook for 2010, said he thought the first three months of this year represented a “bottom” for margins, and they “are now likely to resume a positive trend.”
Profits in 1Q2010 totaled $672 million (56 cents/share), well below the year-ago earnings of $938 million (78 cents). Revenue fell 6.7% to $5.6 billion versus $6 billion in 1Q2009.
North American revenue slid 13% in the first three months of this year from a year earlier, but revenue jumped 18% sequentially. North American earnings were down by almost half (49%) from 1Q2009. Sequentially, all North American units recorded revenue growth, Gould noted.
Schlumberger’s U.S. Land unit grew on increased drilling activity, “coupled with pockets of pricing improvements that benefited Well Services technologies,” Gould said. “Canada experienced significant growth as the result of a strong winter drilling season, particularly for oil basins in the West,” which led to a higher demand for the company’s well services, wireline, and drilling and measurement services.
However, the outlook this year remains cloudy because of low gas prices, said the CEO.
“In North America, commitment drilling to hold leases, as well as interest in domestic oil plays, should sustain current activity levels in the U.S. through the second quarter while Canada will experience the normal spring break-up,” said Gould. “Beyond that, the picture is less clear as natural gas prices and the fundamentals of the natural gas market remain uncertain.”
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