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Schlumberger profit rises as drilling demand expands 

BY DAVID WETHE

HOUSTON (Bloomberg) -- Schlumberger Ltd. said third-quarter profit rose as higher crude prices led to more drilling around the globe.

Net income climbed to $1.7 billion, or $1.29 a share, from $1.4 billion, or $1.07, a year earlier, Houston- and Paris-based Schlumberger said in a statement today. Excluding one-time items, the company exceeded the $1.24 per share average of 31 analysts’ estimates compiled by Bloomberg. Sales increased 11 percent to $11.6 billion.

The quarterly average price for Brent oil, an international benchmark, has remained above $100 a barrel since the start of 2011, according to data compiled by Bloomberg. The average number of rigs active around the world rose 0.9 percent to 3,403 in the quarter from 3,372 a year earlier, according to Baker Hughes Inc.

North America, fueled by growth in the U.S. Gulf of Mexico and improved Western Canada land work, saw revenue increase 7 percent from the second quarter to $3.6 billion, while all regions posted operating profit margins of at least 20 percent, according to the statement.

This is expected to be the fourth consecutive year of “double-digit” spending increases by customers for exploration and production work around the world, CEO Paal Kibsgaard told analysts and investors July 19. The spending gains will be most marked in the Middle East and in Asia, he said. In Brazil, Schlumberger is starting several projects in the second half of the year, he said.

Schlumberger generates about two-thirds of sales outside of North America, the highest ratio among the largest service providers, including Halliburton Co. and Baker Hughes.

The earnings statement was released before the start of regular trading on U.S. markets. Schlumberger, which has 31 buy, four hold and one sell recommendation from analysts, rose 2.2 percent to $93.42 at 7:17 a.m. in New York.

Baker Hughes, the world’s third-largest oilfield services provider, reported third-quarter profit today that, excluding charges, beat the 78 cent per-share average of 30 analyst estimates compiled by Bloomberg.

“Profit margins beat in every segment around the world,” said Scott Gruber, an analyst at Sanford C. Bernstein in New York who rates the shares the equivalent of a buy and owns none, said in a phone interview.

10/18/2013

 

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