Schlumberger 1st-quarter profit falls 28 pct

[April 23, 2010]  NEW YORK (AP) -- Schlumberger Ltd. said Friday its first-quarter profit fell 28 percent as the world's biggest oilfield services provider posted lower revenue and charges related to health care reform.

But the company said it continues to see evidence that higher oil prices will lead to increased drilling activity by its international customers. Slumping demand for oil and a plunge prices in late 2008 and early 2009 had curtailed oil exploration and production around the globe.

The company, based in Paris, earned $672 million, or 56 cents per share, compared with $938 million, or 78 cents per share, a year earlier. Results in the latest quarter include charges totaling 6 cents per share.

Revenue fell 6.7 percent to $5.6 billion, as oilfield services revenue slipped 6 percent.

Wall Street expected earnings per share of 61 cents and revenue of $5.69 billion, according to a survey of analysts by Thomson Reuters.

Schlumberger posted merger and acquisition-related charges of $35 million and a charge of $40 million for the reduction in future tax deductions for retiree medical benefits due to changes related to recently enacted health care reform legislation. Under the new law, businesses will no longer be able to write off a federal subsidy that covers part of the cost of retiree prescription drug coverage.

In a statement, Schlumberger Chairman and CEO Andrew Gould said, the company continued to see a strong performance in North America because of active drilling for natural gas. This was offset by a "sharp drop in the North Sea and Russia due to drilling efficiency and adverse weather."

[Associated Press]

Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.