Tuesday 24 April 2018

Increased activity boosts oilfield firms' profits

New York, October 19, 2013

Increased oilfield activity in US offshore waters and overseas gave a bigger-than-expected lift to profits at Schlumberger and Baker Hughes, marking a clear divide with struggling smaller US oil services firms.
Schlumberger and Baker Hughes executives cited healthy demand from the Middle East and Asia as well as work off the coast of North America, where prices for onshore services remain suppressed by a natural gas glut.
Schlumberger chief executive Paal Kibsgaard said he expects double-digit growth in earnings per share in 2014. "Our customers are in their planning process, but at this stage we foresee a continuation of the overall trend seen in 2013, which revealed another year of steady activity growth," he said on a conference call.
In the third quarter, Schlumberger topped analysts' profit estimates for the eighth consecutive quarter with a 20 per cent rise, helped by unexpected positives out of the US.
"Schlumberger highlighted solid performance despite a flattish US land rig count, driven by improved efficiency in its pressure pumping operations, new technology penetration and market share gains," Barclays analyst James West wrote.
A seasonal rebound in Canadian drilling also contributed to record-high quarterly revenue; about two-thirds of total revenue was generated outside North America. The company cited improvement in Saudi Arabia and Iraq.
Net income rose to $1.71 billion, or $1.29 per share, whereas analysts expected $1.24 per share, according to Thomson Reuters I/B/E/S. Revenue grew 11 per cent to $11.61 billion.
UBS analyst Angie Sedita said earnings would only rise further with the efficiency drive outlined by Kibsgaard last month.
Baker Hughes reported third-quarter net income growth of 22 per cent to $341 million, or 77 cents per share. Excluding items related to restructuring in Latin America, it earned 81 cents per share, while analysts had expected 78 cents.
The Houston-based company has ramped up operations outside North America, where the industry bellwether rig count it compiles is at three-decade highs.-Reuters

Tags: Schlumberger | oil field | Baker Hughes |


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