International drilling boom drives Schlumberger profit
(Reuters) - Schlumberger Ltd (SLB.N), the world's largest oilfield services company, posted a better-than-expected profit for the seventh quarter as drilling activity outside North America touched a 30-year high.
Schlumberger shares rose 2 percent to $80 in trading before the bell on Friday.
The company's exposure to the global offshore drilling boom has helped it offset a volatile North American market, where natural gas prices have remained weak due to excess supply from shale fields.
Exploration and drilling activity rebounded in China and Australia and growth continued in the key markets of Saudi Arabia and Iraq, Chief Executive Paal Kibsgaard said.
The company derives nearly 70 percent of its revenue from international operations, unlike rivals Halliburton Co (HAL.N) and Baker Hughes Inc (BHI.N), which are more dependent on North America.
"The soft global economic picture has changed little since the first quarter. The U.S. has shown virtually no impact from the financial sequester, the Eurozone remains in recession, and data from China continue to be mixed," Kibsgaard said.
Baker Hughes, the world's third-largest oilfield services provider, reported a 45 percent fall in second-quarter profit on Friday, mainly due to weak margins in North America.
Total rig count in North America increased marginally in the second quarter due to growth in oil-focused drilling. Natural gas drilling, however, remains depressed, hurting demand and prices for services such as pressure pumping.
U.S. gas-directed rig count fell to an 18-year low of 353 in June, while rig count outside North America climbed to 1,333, the highest level in 30 years, according to data compiled by Baker Hughes.
Schlumberger's net income rose 49 percent to $2.10 billion, or 1.57 per share, in the second quarter, from $1.40 billion, or $1.05 per share, a year earlier. Excluding certain items, profit was $1.15 per share.
Revenue rose 8 percent to $11.18 billion.
Analysts had expected earnings of $1.10 per share on revenue of $11.11 billion, according to Thomson Reuters I/B/E/S.
Shares of Schlumberger and Baker Hughes have risen about 10 percent in the past three months. Halliburton shares have risen 19 percent on news that the company might settle its liability related to the 2010 Gulf of Mexico oil spill.
(Reporting by Sayantani Ghosh and Braden Reddall in San Francisco; Editing by Saumyadeb Chakrabarty)