Log in
E-mail
Password
Show password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
New member
Sign up for FREE
New customer
Discover our services
Settings
Settings
Dynamic quotes 
OFFON
News: Latest News
Latest NewsCompaniesMarketsEconomy & ForexCommoditiesInterest RatesBusiness LeadersFinance Pro.CalendarSectors 
All NewsEconomyCurrencies & ForexEconomic EventsCryptocurrenciesCybersecurityPress Releases

Schlumberger's profit beats forecast as margins soar on revenue gains

07/23/2021 | 11:20am EDT
FILE PHOTO: The exterior of Schlumberger headquarters building is pictured in the Galleria area of Houston

(Reuters) - Oilfield services giant Schlumberger NV issued a bullish forecast for 2021 on Friday as second-quarter profit topped estimates due to surging margins, with a rebound in oil prices boosting demand for its software and equipment.

Energy services firms are benefiting from a resumption of drilling driven by rising crude prices, which are up 18% in the latest quarter and 42% since the start of 2021.

Still, oilfield activity levels remain far below pre-pandemic levels and oil demand could face a threat as a resurgence of infections from coronavirus variants prompts fresh restrictions in some parts of the world.

Schlumberger officials offered an optimistic outlook for the rest of the year, and said they expect further growth and margin expansion in the company's North American and international operations.

International revenue could rise at a double-digit percentage rate compared with year-ago levels, officials said. Its North American business, which fell 1% versus a year ago, could "surprise to the upside" due to spending by private operators, Chief Executive Olivier Le Peuch said.

"Industry projections of oil demand reflect the anticipation of a wider vaccine-enabled recovery, improving road mobility, and the impact of various economic stimulus programs," Le Peuch said, cautioning the COVID-19 pandemic continues to threaten the demand recovery.

U.S. oil output may not reach pre-pandemic levels until after 2022, Le Peuch said, adding that international supply and demand conditions would push oil and gas activity beyond 2019 levels in the next two to three years.

Rival Halliburton this week also delivered a bullish outlook for the oil industry recovery, while Baker Hughes missed earnings expectations following a hit from restructuring charges.

Schlumberger reported net income of $431 million, or 30 cents per share, for the three months to June 30, compared with $299 million, or 21 cents per share, in the first quarter. Wall Street analysts had anticipated earnings of 26 cents per share, according to Refinitiv IBES.

Operating margins nearly doubled to 14.3%, the highest since 2018, led by big gains in its software and reservoir performance units. Those gains, which marked the fourth consecutive quarter of margin expansion, reflected past cost-cutting and big year-over-year software revenue increases.

Analysts for investment firm Tudor Pickering Holt & Co said the results were strong, but lamented that Schlumberger's stock - along with other oilfield companies - had continued to underperform.

Shares were up a fraction in early trading at $28.08. They are up about 28% year-to-date, trailing the jump in oil prices.

(Reporting by Arunima Kumar in Bengaluru and Liz Hampton in Denver; Editing by Sriraj Kalluvila and Pravin Char and Kirsten Donovan)

By Liz Hampton and Arunima Kumar


ę Reuters 2021
Latest news "Economy & Forex"
05:57pCanada's Aurora Cannabis to shut down a facility in Edmonton
RE
05:43pStocks fail to rebound after Monday's sell-off
RE
05:34pUtilities Shares Fall -- Utilities Roundup
DJ
05:34pThe WSJ Dollar Index Falls 0.05% to 87.79 -- Data Talk
DJ
05:34pEuro Lost 0.01% to $1.1728 -- Data Talk
DJ
05:34pSterling Gains 0.01% to $1.3659 -- Data Talk
DJ
05:33pEntergy estimates repair costs of up to $2.6 bln from Hurricane Ida
RE
05:33pDollar Lost 0.17% to 109.22 Yen -- Data Talk
DJ
05:33pDogecoin Lost 3.68% to $0.202 at 5 p.m. ET -- Data Talk
DJ
05:33pDraftKings courts UK's Entain with $22.4 billion offer as U.S. sports betting spurs deals
RE
Latest news "Economy & Forex"