Schlumberger Ltd.’s 11th consecutive quarter of beating analysts’ earnings estimates failed to impress investors Thursday as the largest oilfield servicer said the world’s economic situation would be slow to change.
“The overall global economic outlook continues to be mixed,” Chief Executive Officer Paal Kibsgaard said in a statement. Kibsgaard sees “a slightly more cautious” short-term outlook for gross domestic product gains as the U.S. recovers from a harsh winter, Europe experiences “anemic” growth, forecasts for Brazil weaken and China’s economy stabilizes.
Excluding one-time items, the Paris- and Houston-based company earned $1.37 a share in the second quarter, exceeding the $1.36 average of 31 estimates compiled by Bloomberg. Sales climbed 7.8 percent to $12.1 billion, beating the $11.95 billion estimate.
Results from North America, where shale formations have driven a boom in oil and natural gas production, were a bit below expectations, said Rob Desai, an analyst at Edward Jones in St. Louis. International results were led by the region encompassing Europe, Africa and Russia, with sales climbing 13 percent to $3.27 billion, from $2.88 billion in the first quarter. The company generates about two-thirds of sales outside of North America, the highest rate among the largest service providers, including Halliburton Co. and Baker Hughes Inc.
“It was a good quarter, not a great quarter,” Desai, who rates the shares a buy and doesn’t own them, said in a phone interview. “They didn’t kill it, but it’s a good progression.”
The earnings statement was released after the close of regular trading in New York. Schlumberger, which has 36 buy and two hold recommendations from analysts, fell 1.4 percent to $113 at 5:31 p.m.
In addition to drilling wells, Schlumberger’s services include mapping where pockets of oil sit under the earth’s surface and completing wells with hydraulic fracturing, or fracking, which blasts water, sand and chemicals underground to free trapped hydrocarbons.
Net income dropped to $1.8 billion, or $1.37 a share, from $2.2 billion, or $1.66, a year earlier, Schlumberger said. Last year’s results included a one-time $1.03 billion gain from the formation of a joint venture with Cameron International Corp.
Schlumberger recorded a $205 million charge in the quarter amid settlement talks stemming from a 2009 grand jury probe of its operations in countries subject to sanctions. There’s no certainty a settlement will be reached, the company said.
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