* Fourth-quarter EPS $1.08, ex-items, vs est $1.07
* Targets double-digit earnings growth in 2013
* Sees Saudi rig count up this year, US count up in Q1
* Shares rise 2.5 percent
By Thyagaraju Adinarayan and Braden Reddall
Jan 18 Schlumberger Ltd on Friday
reported fourth-quarter earnings just above recently reduced
expectations, lifted by strong growth in oil and gas services
beyond the shores of North America.
Schlumberger, the oilfield services sector leader, posted
its fifth straight estimate-beating quarterly profit as growth
in the deepwater Gulf of Mexico, Latin America, the Middle East
and Asia made up for a slowdown on North American land.
International markets accounted for about two-thirds of its
total 2012 revenue of $42.15 billion, which has helped the
company build on its lead over Halliburton Co.
Schlumberger shares rose more than 2 percent early on
Friday, while Halliburton was up more than 1 percent.
"In a challenging quarter for oil service companies, once
again Schlumberger is clearly differentiating itself," said
analyst James Crandell of Dahlman Rose & Co.
Oil and gas companies have slowed onshore exploration in
North America as the going prices for natural gas and natural
gas liquids, such as butane and propane, remain low.
While Schlumberger Chief Executive Paal Kibsgaard sees the
negative impact of the glut still weighing on margins in the
region, he expects the number of North American rigs to rise by
between 100 and 150 in the first quarter.
Kibsgaard said Saudi Arabia's rig count would rise by about
25 rigs this year to 160, though global oil demand would grow at
a similar pace to 2012 and spare capacity would be unchanged.
DOUBLE-DIGIT EARNINGS AHEAD
Kibsgaard forecast client spending in international markets
would rise 10 percent, compared with no growth in North America,
but Schlumberger earnings should grow by double digits in 2013.
"This is assuming no major setback in the global economy and
also no further significant setbacks in North America,"
Kibsgaard told analysts on a conference call.
Schlumberger cut its 2013 capital budget to $3.9 billion
from $4.7 billion last year, and analysts at Simmons & Co expect
spending directed at North American land to be "eviscerated."
Fourth-quarter net income fell to $1.37 billion, or $1.02
per share, from $1.41 billion, or $1.05 per share, a year
before. Excluding items, earnings were $1.08 a share versus the
analysts' view of $1.07, according to Thomson Reuters I/B/E/S.
Revenue increased 8 percent to $11.17 billion, comfortably
beating the average estimate of $10.82 billion.
Just over a month ago, Schlumberger warned the North
American slowdown and contract delays in Europe and Africa would
knock fourth-quarter earnings down by 5 cents to 7 cents per
Latin America revenue rose 13 percent, while the Middle East
and Asia jumped a combined 21 percent, compared with a 3 percent
drop in North America.
UBS analyst Angie Sedita noted strength in Gulf of Mexico
deepwater drilling more than offset onshore U.S. weakness.
Offshore revenue was up 24 percent from the previous quarter.
Schlumberger, with its main offices in Paris, Houston and
The Hague, raised its dividend by 13.6 percent on Thursday.
The company's shares rose 2.5 percent to $75.20 on the New
York Stock Exchange. The stock is now up about 8 percent this
year, compared with 6 percent for Halliburton.
Halliburton, the U.S. market leader and the largest
hydraulic fracturing company, is due to report earnings next
Friday. Baker Hughes Inc, the industry No. 3, releases
its fourth-quarter numbers on Jan. 23.