Good Omen
AP
Schlumberger 4Q Profit Rises
Friday January 18, 6:59 am ET
By John Porretto, AP Business Writer
Schlumberger 4th-Quarter Profit Climbs 22 Percent on International Demand
HOUSTON (AP) -- Oilfield services company Schlumberger Ltd. said Friday net profit rose 22 percent in the fourth quarter, driven by demand in the Eastern Hemisphere and Latin America.
Schlumberger reported a net profit of $1.38 billion, or $1.12 per share, compared to a year-earlier profit of $1.13 billion, or 92 cents per share. Revenue rose to $6.25 billion from $5.35 billion a year earlier.
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Analysts surveyed by Thomson Financial on average expected quarterly profit of $1.13 per share on revenue of $6.14 billion.
For the future, though, Schlumberger was cautious.
"Shorter-term growth presents a more complex picture than the immediate past," Schlumberger chairman and chief executive Andrew Gould said in a statement.
The company said lower pricing in U.S. land operations and seasonal weather factors contributed to less-than-satisfactory margins in the fourth quarter. It also noted that absent any severe weather for the remainder of winter, natural gas drilling is not expected to vary greatly from recent levels.
On a positive note, the company said land activity outside North America is expected to remain strong, as is global seismic exploration.
"Within this context, technology that assists our customers in mitigating risk in exploration and development projects, increasing recovery factors and improving operational efficiency will remain at a premium," Gould said.
Schlumberger, which helps oil and natural gas companies extract hydrocarbons through a variety of services, equipment and expertise, has benefited in recent quarters from strong demand because of high oil prices, which reached $100 a barrel last month. Its stock price rose more than 50 percent last year.
But the stock has dipped of late, along with others in the sector, amid fears a slowing economy could diminish demand for oil.
The American Petroleum Institute said Thursday that domestic demand for oil was unchanged in 2007 at 20.7 million barrels a day, but slipped 0.4 percent in the fourth quarter. The trade group said consumers appear to be responding to higher fuel prices.
Schlumberger was the first big oil-sector company to report earns, and industry observers were eager for its results.
For all of 2007, Schlumberger said net income rose to $5.18 billion, or $4.20 a share, versus $3.71 billion, or $3.01 a share, in 2006. Revenue increased to $23.3 billion from $19.2 billion a year ago.
AP Business Writer Ben Berkowitz in New York contributed to this stroy
