Schlumberger Sees Improved Pricing but Margins Still Slim
Schlumberger NV said on Friday a ramp up in drilling activity in North America boosted pricing for its oilfield services, but the cost of reactivating equipment idled during the oil price downturn dragged down margins.
The U.S. rig count rose more than 25 percent in the first three months of the year, according to data from Baker Hughes Inc.
"In the first quarter, the North America land market continued to strengthen in terms of both activity and pricing, leading us to begin accelerating deployment of idle capacity for multiple product lines," Chief Executive Paal Kibsgaard said.
The world's No.1 oilfield services provider said revenue rose 5.7 percent to $6.89 billion in the quarter ended March 31, but its cost of revenue increased 11.3 percent to $6.08 billion.
Schlumberger and its rivals are reactivating idled rigs and equipment as crude oil prices stay above $50 per barrel, encouraging oil producers to resume drilling after a more than two-year lull in activity.
The company's pre-tax operating margins fell to 11 percent in the latest quarter, from 13.8 percent a year earlier.
Net profit attributable to Schlumberger (SLB) fell to $279 million, or 20 cents per share, in the quarter, from $501 million, or 40 cents per share, a year earlier. (http://bit.ly/2ox4Wg5)
Excluding items, Schlumberger earned 25 cents per share in the latest quarter, in-line with analysts' estimates, according to Thomson Reuters I/B/E/S.
Analysts' on average had estimated revenue of $6.96 billion.
Up to Thursday's close, Schlumberger shares had fallen nearly 9 percent this year.
Reporting by Arathy S Nair
