UPDATE 2-Schlumberger profit halves as clients' spending cuts weigh

Thu Apr 21, 2016 5:57pm EDT
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

* Slashes 2016 capex to $2.0 bln from $2.4 bln

* Q1 N.America pretax operating margin -0.7 pct vs. 12.9 pct

* Q1 earnings/shr 40 cents vs. estimates 39 cents

* Outlook for oil markets remains unchanged - CEO (Adds details, analyst's comment, graphic)

April 21 (Reuters) - Schlumberger Ltd's profit nearly halved in the first quarter, but the fall was slightly less than analysts estimated, as cost cuts helped cushion the impact of the continued decline in drilling and completion activity.

The world's No.1 oilfield services provider said its costs to do business in North America exceeded the revenue it earned there in the quarter, the first time it had negative margins in the region since oil prices started falling in mid-2014.

"North America was the biggest surprise to the downside, with negative margins, which did not occur during 2008-2009 oil drop," Edward Jones analyst Rob Desai said.

The slump in global drilling activity reached unprecedented levels in the latest quarter and is expected to continue deteriorating, Schlumberger Chief Executive Paal Kibsgaard said in a statement on Thursday.

"Our overall outlook for the oil markets remains unchanged, with the tightening of the supply-demand balance expected to continue during the rest of the year," Kibsgaard said.   Continued...