Schlumberger (SLB) reported second-quarter revenue that was ahead of analysts’ expectations on Friday, driven by gains in its international business and as the oil-field services company said there were more signs of an upturn in exploration and production.
Revenue was almost flat year-on-year at $8.27 billion compared with $8.3 billion a year earlier, while the consensus on Capital IQ was for $8.11 billion. Earnings excluding charges and credits fell to $0.35 a share from $0.43 a share previously, but that was in line with the Street’s views.
“These results reflect the normalization in global E&P spend that we were anticipating as international investment increases in response to the accelerating decline int he mature production base, and North America land investment decreases due to E&P operator cash flow constraints,” said Paal Kibsgaard, the company’s chief executive.
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International revenue rose 8% to $5.46 billion, while North American revenue fell 11% to $2.8 billion, Schlumberger said.
Kibsgaard said the company is expecting sentiment in oil markets to remain balanced, even as the demand forecast for this year was lowered because of trade-war worries and geopolitical tensions.
“On the supply side, we continue to see US shale oil as the only near- to medium-term source of global production growth, albeit at a slowing growth rate,” he said.
Schlumberger maintained a projection for international exploration and production investment to grow 7% to 8% this year, “further supported by the increase in international rig count,” the CEO said. “In contrast, spending in North America land is tracking our expectations of a 10% decline this year.”
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