Schlumberger Income Increases

Schlumberger Limited today reported full-year 2013 revenue from continuing operations of $45.27 billion versus $41.73 billion in 2012.

Full-year 2013 income from continuing operations attributable to Schlumberger, excluding charges and credits, was $6.33 billion, representing diluted earnings-per-share of $4.75 versus $4.01 in 2012.

Fourth-Quarter Results

Fourth-quarter 2013 revenue was $11.91 billion versus $11.61 billion in the third quarter of 2013, and $11.08 billion in the fourth quarter of 2012.

Income from continuing operations attributable to Schlumberger, excluding charges and credits, was $1.79 billion—an increase of 4% sequentially and an increase of 28% year-on-year. Diluted earnings-per-share from continuing operations, excluding charges and credits, was $1.35 versus $1.29 in the previous quarter, and $1.04 in the fourth quarter of 2012.

Schlumberger recorded charges of $0.09 per share in the fourth quarter of 2013 versus $0.06 per share in the fourth quarter of 2012. Schlumberger did not record any charges or credits in the third quarter of 2013.

Oilfield Services revenue of $11.91 billion was up 3% sequentially and increased 7% year-on-year. Oilfield Services pretax operating income of $2.60 billion was up 4% sequentially and increased 23% year-on-year.

Schlumberger CEO Paal Kibsgaard commented, “We ended 2013 with revenue of more than $45 billion, up 8%, and growing for the fourth consecutive year. International Area revenue grew by $3.2 billion, or 11%, from higher exploration and development activity–both offshore and in key land markets. In North America, we demonstrated continued resilience to the challenges of the land markets by growing the business by close to $400 million, or 3%, aided by our strong position in the offshore market, particularly in the US Gulf of Mexico. Full-year pretax operating income grew 15%, with International delivering a 24% increase and International margin expanding by more than 200 basis points for the second consecutive year to reach 22.2% while still posting a margin of 19.7% in North America.

Our fourth-quarter results were driven by solid activity in key international markets and strong year-end product, software and multiclient seismic sales in almost all areas. Growth was strongest internationally, where revenue set a new record high, but all Areas recorded sequential growth underpinned by the quality and efficiency of our execution. Overall results were, however, impacted by the temporary shutdown of activity in South Iraq and seasonal slowdowns in North America, the North Sea, Russia and China.

Geographical results were led by the Middle East & Asia, with continuing strength in the key markets of Saudi Arabia and the United Arab Emirates as well as in exploration activity in Malaysia and Australia. Deepwater exploration work and strong project management activity in Argentina and Ecuador led Latin America higher, while Europe/CIS/Africa made progress through significant activity in Angola, Azerbaijan and Turkmenistan. In North America, deepwater activity in the Gulf of Mexico continued to be strong, while on land increased service intensity, improved efficiency, market share gains, and new technology uptake was again offset by further pricing weakness in most product lines.

Among the Technologies, year-end sales most benefited the Production and Reservoir Characterization groups. Software and multiclient license sales were more than sufficient to offset seasonal effects in WesternGeco and Wireline activity as seismic surveys and exploration drilling projects were completed in northern regions. Underlying activity was robust for the Drilling Group on international demand in key markets and grew in Mexico, Saudi Arabia and Iraq for integrated project management work. New technology sales remained strong across all groups, offering select opportunities for higher pricing in a competitive international market.

The overall global economic outlook continues largely unchanged, with fundamentals continuing to improve in the U.S., and Europe seemingly set for stronger growth. These positive effects should overcome lower growth in some developing economies and support a continuing rebound in the world economy. Largely as a result, forecasts for oil demand in 2014 have been revised upwards to reach the highest demand growth in several years. Supply is expected to keep pace with demand, with the market, therefore, remaining well balanced. Natural gas prices internationally should be supported by demand in Asia and Europe. In the U.S., we see no change in fundamentals, with any meaningful recovery in dry gas drilling activity some way out in the future.

The quality of our results in 2013 was driven by strong new technology sales and an unwavering focus on execution and resource management. With E&P spending expected to grow further in 2014, led by international activity and continuing strength in deepwater US Gulf of Mexico, we remain positive about the year ahead on the back of a well-balanced business portfolio, wide geographical footprint and strong operational, organizational, and executional capability.”

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Press Release, January 17, 2014