Schlumberger Posts a Loss as Job Cuts Deepen

Schlumberger Ltd. swung to an unexpected second-quarter loss, hurt by charges related to restructuring efforts and the oil-field services giant's acquisition of Cameron International Corp.

Schlumberger also continued with its cost-cutting efforts, saying it had cut roughly 16,000 workers in the first half due to weakness in activity that it expects to persist throughout the year. Schlumberger's second-quarter job cuts totaled 8,000, bringing the number to 50,000 since the company reached its peak employment in 2014, when it had 129,000 workers. Schlumberger's current workforce is about 100,000, which includes workers it added when it bought Cameron.

"In the second quarter, market conditions worsened further in most parts of our global operations, but in spite of the continuing headwinds, we now appear to have reached the bottom of the cycle," Chairman and Chief Executive Paal Kibsgaard said in prepared remarks.

Schlumberger's results come a day after rival Halliburton Co.'s management predicted the sector is poised for a rebound, with a small rise in the rig count expected later this year and a significant increase anticipated next year. However, Halliburton also posted a second-quarter loss on charges related to its failed tie-up with rival Baker Hughes Inc. and said it was still working to reduce costs. Baker Hughes reports its second-quarter results next week.

Halliburton said Wednesday that it cut another 9% of its workforce, or roughly 5,000 employees, during the second quarter. The company said its head count now stands at over 50,000 employees—about 40% below its peak in 2014.

Energy producers have slashed budgets as oil prices have remained low, leading to lower demand and weaker prices for Schlumberger and other companies that provide services such as drilling and completing wells. In turn, Schlumberger and its rivals have idled equipment and shed thousands of employees.

The three-month period ended June 30 marks the first quarter to include results from Cameron, which makes drilling equipment and supplies maintenance equipment to pipelines, refineries and oil-and-gas wells. Schlumberger completed its cash-and-stock deal for Cameron, which initially was valued at $12.7 billion, on April 1.

Revenue in Schlumberger's North American business dropped 26% to $1.74 billion, from the $2.26 billion reported a year earlier. However, North American revenue improved 19% from the first quarter.

Outside North America, Schlumberger's revenue declined 20% to $4.36 billion from the $6.53 billion a year earlier. International revenue also improved quarter-to-quarter, increasing by 8%.

Over all, Schlumberger reported a loss of $2.16 billion, or $1.56 a share, compared with a year-earlier profit of $1.12 billion, or 88 cents a share, a year earlier. Excluding acquisition- and integration-related charges, asset write-downs and other items, adjusted per-share earnings were 23 cents. Revenue slumped 20% to $7.16 billion.

Analysts polled by Thomson Reuters expected per-share profit of 21 cents and revenue of $7.13 billion.

Write to Tess Stynes at [e-mail] and Alison Sider at [e-mail]

(END) Dow Jones Newswires

July 21, 2016 18:15 ET (22:15 GMT)

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