SLB 95.30 Schlumberger stumbles but remains upbeat
Shares in oil services firm Schlumberger (SLB) slumped after the company posted first-quarter earnings that came up a nickel shy of the Wall Street estimate. The New York-based driller made $1.3 billion, or $1.06 a share, from continuing operations for the quarter ended March 31, up from the year-ago $1.18 billion, or 96 cents a share. Analysts were looking for $1.11 a share, however, and the stock dropped 4% in early trading, despite CEO Andrew Gould’s bullish forecast for the company’s prospects, based in part on the past year’s surge in energy prices.
“In the absence of a severe global recession leading to a steep drop in demand, the thin cushion of excess oil supply and the failure to stem decline rates in many countries, coupled with the higher-than-expected drawdown of US natural gas storage, are all factors that lead us to conclude that growth will strengthen as the year progresses,” he said. “We remain convinced that current investment levels are insufficient to both stem decline and to explore and develop new reserves and, as a result, we anticipate that the current cycle of exploration and production spending will remain stronger for a longer period than we originally anticipated.”
