Charges and revenue drop drag Schlumberger into the red

Oilfield services major Schlumberger recognised a $3.34 billion loss in the second quarter on $3.7 billion charge and revenue drop of some 35 per cent.

The loss of $2.47 per share compares with profit of 35 cents per share same time last year.

Revenues fell from $8.26 billion in Q2 2019 to $5.35 billion mainly due to North America activity drop and Covid-19 related reduction in the international markets.

Sequentially, Schlumberger saw revenue decline of some 28 percent, while the loss narrowed from $7.37 billion.

For the first six months of 2020, the company booked loss of $10.81 billion on revenue of $12.81 billion.

This compares with last year’s first half profit of $923 million and revenues of $16.14 billion.

“This has probably been the most challenging quarter in past decades,” said Olivier Le Peuch, Schlumberger CEO.

“Schlumberger second-quarter revenue declined 28% sequentially, caused by the unprecedented fall in North America activity, and international activity drop due to downward revisions to customer budgets accentuated by COVID-19 disruptions.

“This speaks volumes about an industry confronted with historic oil demand and supply imbalances caused by demand destruction from the global COVID-19 containment effort.”

In response to market conditions, Schlumberger recorded $3.7 billion of pretax restructuring and asset impairment charges.

This includes $1 billion of severance costs, as of the end of the quarter.

In the first quarter of this year the company also recognised $8.5 billion in charges, primarily relating to the impairment of goodwill, intangible assets, and other long-lived assets

Meanwhile, OneSubsea revenue was resilient, only declining slightly with international growing sequentially, but offset by a decline in North America.

Sequentially, OneSubsea revenue fell 18 per cent at $1 billion, while year-over-year revenue was down 24 per cent.