For the June quarter, the leading oilfield services provider’s income from its continuing operations (excluding charges and credits) came to $US1.12 billion ($A1.51 billion) which was down 17% in this regard from the previous quarter and also down 38% year-on-year.
However, the results were still better than expected with Schlumberger shares ending up 1.3% overnight to $85 in extended trading.
Schlumberger chairman and CEO Paal Kibsgaard said overall June quarter revenue was down 12% from the previous quarter.
He said this was driven by the dramatic decline in North American land activity as the rig count dropped by a further 40% and as pricing erosion continued in both North America and the International Areas.
“Despite the much more challenging market conditions, overall pretax operating margins were maintained at levels well above the previous downturns as we continued to proactively manage costs and resources, carefully navigate the commercial landscape, and further accelerate our transformation program.
“The success of our efforts can be seen in pretax operating margins of 10.2% in North America and 24.5% internationally while generating $1.5 billion in free cash flow, representing 132% of earnings.”
No more job cuts were announced either. In early January Schlumberger revealed plans to cut 9000 jobs while in the March quarter results it announced another 11,000 to take the 2015 total to 20,000 – equivalent to shedding about 15% of the total workforce.
Kibsgaard indicated that the US rig count might finally improve too.
“Exploration and production investment in North America is now expected to fall by more than 35% in 2015 driven by lower land activity and increased pricing pressure. We believe that the North American rig count may now be touching the bottom, and that a slow increase in both land drilling and completion activity could occur in the second half of the year.
“In the international market, E&P spending is now expected to drop more than 15%. We do not expect any upward adjustment to existing 2015 budgets but see a continuation of first-half trends with low exploration activity, tight management of development-related spend, and continued pricing pressure.”
