Schlumberger sees Q1 dip in earnings
Schlumberger's adjusted core earnings slumped by 19% year/year to $1.3bn in the first quarter, despite a significant revenue increase, Schlumberger said on April 4.
Turnover at the oilfield services giant rose by 14% yr/yr to $6bn, from $5.2bn in March 2021. The biggest contributors were Schlumberger's well construction and reservoir performance divisions, which both grew by more than 20% yr/yr.
However reservoir performance decreased 6% quarter/quarter to $1.2bn, amid seasonal demand changes in the northern hemisphere, and reduced Latin American intervention and stimulation activity. Schlumberger said the fragile ruble had also impacted the division's revenues.
Schlumberger's foreign backlog accounted for around $4.6bn of the revenue, with $1.2bn generated in North America. Company CEO Olivier Le Peuch predicted full-year revenue growth in the "mid-teens" and a "significant" earnings increase.
"Compared to the same quarter last year, revenue grew 14%; EPS - excluding charges and credits - increased 62%; and pretax segment operating margin expanded 229 basis points, led by well construction and reservoir Performance.
"These results reflect the strength of our core services divisions, the broad-based activity increase, and the continued realisation of our improved operating leverage."
Regarding the Ukraine war, Le Peuch expressed grave concern about the conflict and its impact on Russia-based employees and assets. Schlumberger temporarily halted Russian investment and technology deployments in March, but is committed to "existing activity" where contractually obliged.
"Accordingly, we established local and global crisis management teams to respond to the crisis and its effect on employees, business, and our operations," he said. "In addition to ensuring that our operations are compliant with developing sanctions, we took the step in the quarter to suspend new investment and technology development to our Russia operations."
Shareholders will receive a $0.175/share quarterly dividend for the first quarter, satisfying a 40% increase in the sequential dividend approved by Schlumberger's board on April 21.