SCHLUMBERGER: The oil industry will continue to deteriorate
Andrew Burton/Getty Images
Schlumberger just reported its first-quarter earnings and restated its bearish near-term outlook on the oil industry.
The world's largest oilfield-services company posted adjusted earnings per share (EPS) of $0.40, with a 63% year-on-year drop in net income, excluding charges and credits to $501 million.
Revenues fell 36% compared to last year to $6.52 billion.
Analyst expectations were for adjusted EPS of $0.39 on revenues totaling $6.51 billion. So it was a beat on earnings, with revenues coming in more or less in line.
In the earnings release, the company said the oil industry would continue to be characterized by a supply-demand imbalance.
CEO Paal Kibsgaard said (emphasis added),
During the first quarter of 2016, the decline in global activity and the rate of activity disruption reached unprecedented levels as the industry displayed clear signs of operating in a full-scale cash crisis. Budgeted E&P spend fell again and substantially affected our operating results. This environment is expected to continue deteriorating over the coming quarter given the magnitude and erratic nature of the disruptions in activity.
Kibsgaard further said recent surveys on exploration and production spending showed sharper declines than previously expected.
"In navigating this landscape, we remain focused on balancing market share against profitability while also working to best preserve the core capabilities of the company for the long term," he said. "We will continue to tailor costs and resources to activity, while remaining cautious in adding back capacity given the unpredictable nature of the current market."
Two weeks ago, Schlumberger reaffirmed its expectation for quarterly revenues and said it would reduce operations in Venezuela, after the country's national oil company failed to pay up.
Venezuela's economy has been trounced by the slide in oil prices, as have Schlumberger 's profits.
Schlumberger shares had jumped 15% year-to-date through Thursday's market close, but were down 12% over the past year. They rose by as much as 1% in after-hours trading.
Google
No comments:
Post a Comment