Schlumberger Profit Falls 30%

Schlumberger Ltd.'s second-quarter earnings fell 30% on plunging revenue, as the oil-services sector continues to grapple with weak oil prices.

Schlumberger reported a profit of $1.12 billion, or 88 cents a share, down from $1.6 billion, or $1.21 a share, a year earlier. Revenue dropped 25% to $9.01 billion.

Aanalysts polled by Thomson Reuters, however, had expected per-share profit of 79 cents and revenue of $8.97 billion. And the company's stock price rose 1.3% to $85 in recent after-hours trading, as per-share earnings and revenue nonetheless beat expectations.

Second-quarter revenue in North America declined 39%. For its operations outside North America, Schlumberger reported revenue fell 19%.

Chief Executive Paal Kibsgaard said he expects investment by oil exploration and production companies to decline more this year than previously expected. Spending in North America is expected to tumble by more than 35%, compared with a previous estimate for a decline of more than 30%, driven by reduced land activity and increased pricing pressure.

Schlumberger helps oil producers drill and frack wells. It competes with Halliburton Co. and Baker Hughes Inc., which are planning to merge.

"We believe that the North American rig count may now be touching the bottom, and that a slow increase in both land drilling and completion activity could occur in the second half of the year," Mr. Kibsgaard stated.

In the international market, Schlumberger expects investment to decline more than 15%, compared with its earlier view for a decline of roughly 15%.

Schlumberger and its rivals have been cutting costs to reflect weaker demand for their services from oil producers spurred by weak prices for crude. Halliburton and Baker Hughes also have been cutting jobs in recent quarters.

Halliburton plans to release its second-quarter results on Monday, while Baker Hughes is set to report on Tuesday.

Write to Tess Stynes at [e-mail]

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