Schlumberger 2Q profit rises as business revives

[July 21, 2012]  HOUSTON (AP) -- Schlumberger Ltd.'s second-quarter net income rose 5 percent as its oilfield services business picked up in the Gulf of Mexico, Africa and other locations.

The Houston company provides a variety of equipment and services for the oil and gas industry. It pumps high-pressure fluids underground to unlock oil and natural gas in a process called hydraulic fracturing, or "fracking." It helps companies evaluate how much oil sits in underground reservoirs, and Schlumberger provides drill bits, sensors, software and other equipment that are in constant demand during a drilling operation.

Schlumberger said profit rose thanks to a surge in deepwater drilling in the Gulf of Mexico following the 2010 oil spill. There were also more offshore projects in international waters as oil companies worked to replace the production lost in Libya during its 2011 rebellion.

The company reported net income of $1.4 billion, or $1.05 per share, for the three months ended June 30. That compares with $1.34 million, or 98 cents per share, for the 2011 second quarter. The number of shares outstanding dropped 2 percent from last year, which increased per-share results for the recent quarter.

Revenue increased by 16.2 percent in the quarter to $10.45 billion, from $9 billion last year.

Analysts were expecting earnings of $1 per share on revenue of $10.47 billion, according to FactSet.

Schlumberger said its net income was driven by higher pretax profits in its reservoir characterization and drilling businesses. Pretax profits were flat for production services.

Geographically, pretax profits rose for its oilfield services in North America, Latin America, Europe and Africa. They lagged in the Middle East and Asia.

Schlumberger is the largest publicly traded oilfield services firm. Cross-town rival Baker Hughes Inc. on Friday posted a 30 percent jump in second-quarter net income, thanks to increased overseas drilling. Halliburton Co. plans to release its financial results on Monday.

Schlumberger shares rose by $1.31, or 1.9 percent, to $69.95 in midday trading.

[Associated Press]

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