Schlumberger Beats Third Quarter Earnings Estimates as Oilfield Activity Recovers

Oct. 22 (Reuters) – Top oilfield firm Schlumberger NV (SLB.N) reported third-quarter profit that surpassed Wall Street estimates Friday and echoed a rival’s forecast for a 20% increase in North American spending next year, as producers benefit from a rebound in crude prices.

Global oil prices have risen nearly 64% to over $85 a barrel since the start of 2021 as a result of a vaccine-fueled recovery in demand. According to data from Baker Hughes, the global number of rigs at the end of the third quarter was 1,448, compared to 1,019 a year earlier.

“The sector’s macro fundamentals have visibly strengthened this year, particularly in recent weeks – with demand rebounding, oil and gas commodity prices at recent highs, low inventory levels and encouraging trends in pandemic containment efforts” Schlumberger Chief Executive Officer Olivier Le Peuch said in a statement, adding that he expects those conditions to significantly boost investment in the coming years.

Le Peuch estimated that North American capital spending would increase by about 20% next year, in line with a recent forecast by colleague Halliburton. He expects international spending to grow in the mid-teens.

According to Refinitiv IBES, Schlumberger reported net income of $550 million, or 39 cents per share, for the quarter. Revenue of $5.8 billion fell short of analyst expectations of $5.9 billion, but grew 11% year-over-year.

Shares of Schlumberger fell at market opening, but then rebounded slightly, falling 0.85% in early trading to $34.01. They are up 55% over the year, surpassing gains made in the same period by Baker Hughes (BKR.N) and Halliburton (HAL.N).

Wall Street analysts said the results were positive, pointing to improved margins, which beat expectations and rose for five consecutive quarters.

“These results are a wonderful breath of fresh air,” analysts at investment firm Tudor, Pickering, Holt & Co wrote in a note. They called the start of the oilfield earnings season “rough,” with Halliburton and Baker Hughes’ results stalled by Hurricane Ida-related disruptions and supply chain problems. read more

Reporting by Arunima Kumar in Bengaluru and Liz Hampton in Denver; Editing by Sriraj Kalluvila and David Evans

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