Schlumberger posts surprise loss, job cuts as CEO sees bottom
HOUSTON (Bloomberg) -- Schlumberger reported an unexpected loss and cut more jobs as cheap crude has pushed a recovery in the oilfield services market out further than expected. Chief Executive Paal Kibsgaard said the worst may be over.
The second-quarter loss was $2.16 billion, or $1.56 cents a share, compared with a profit of $1.12 billion, or 88 cents, a year earlier, the Houston- and Paris-based company said in a statement Thursday. It was expected to post a $296.3 million profit, according to the average of 28 analysts’ estimates compiled by Bloomberg. The company also said it cut more than 16,000 jobs in the first half of the year.
As the downturn dragged on, executives at the world’s largest oilfield services provider have had to push back their expectations for an improvement in drilling and fracing work, with crude prices remaining more than 50% lower than their peak in 2014. Schlumberger rose in after-markets trading as Kibsgaard said the downturn appears to have bottomed.
"In the second quarter market conditions worsened further in most parts of our global operations," Kibsgaard said in the statement. "But in spite of the continuing headwinds we now appear to have reached the bottom of the cycle."
Stock Reaction
The stock, which closed 0.7% lower at $80.02, gained as much as 0.7% in after-hours trading.
Schlumberger has made several rounds of job cuts to adjust to lower spending by its customers. Schlumberger’s President Patrick Schorn said last month that the second quarter "may represent the final approach to a market bottom."
In April, Schlumberger closed its $14.8-billion takeover of Cameron International Corp., marking the largest deal among oilfield contractors this year.
Halliburton, the world’s second-largest oilfield services provider, reported a second-quarter loss of 14 cents per share, excluding certain items, earlier this week. The company also said the North American market reached its lowest point in the downturn during the second quarter and forecast a "modest uptick" in the rig count for the remainder of the year.
"The major debate is the trajectory of North America recovery," J. David Anderson, an analyst at Barclays, wrote July 19 in a note to investors. "We expect SLB and HAL again to provide contrasting narratives on North America."
