Schlumberger 3Q profit falls 48 percent

[October 23, 2009]  NEW YORK (AP) -- Schlumberger said Friday the worst effects of the economic slump may be over, even though the company's third-quarter profits dropped 48 percent from a year earlier.

The Houston-based oil company, which helps drillers pull oil and gas from the ground, was hit hard this year as crude prices sagged and drilling companies idled half of their rigs in the U.S.

Schlumberger Ltd. said it earned $787 million, or 65 cents per share, for the third quarter. Analysts expected 63 cents per share, according to Thomson Reuters. It earned $1.53 billion, or $1.25 a share, in the same quarter a year ago.

Schlumberger rival Halliburton Co. reported a 61 percent drop in third-quarter profits last week.

The company said demand for oil and gas has gotten stronger, and it expects further improvement. Gas drilling in North America has increased slightly, but Schlumberger warned that recovery is "fragile," and that service activity and prices won't improve very much until late 2010.

"The worst, provided the economy continues to show signs of recovery, is behind us," the company said in assessing the overall outlook.

Schlumberger's revenue fell 25 percent to $5.43 billion from $7.26 billion a year ago and missed analyst estimates of $5.48 billion.

However, the company said its results held steady compared with the second quarter of 2009. Oilfield service revenue ticked down to $4.95 billion from $4.96 billion. Most of the increase in gas drilling came from Canada.

North American revenue was unchanged at $823 million, while revenue from Europe, Russia and Africa held steady and $1.78 billion. Latin American revenue and Middle East and Africa revenue both slipped 6 percent, to $1.07 billion and $1.23 billion respectively.

Revenue from the WesternGeco business fell 17 percent to $463 million.

[Associated Press]

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