Schlumberger 2Q profit jumps 64 pct

AP News
Posted: Jul 22, 2011 7:49 AM
Schlumberger 2Q profit jumps 64 pct

Schlumberger Ltd. said Friday that second-quarter profits jumped 64 percent on a surge in North American oil drilling.

The Houston oil services company reported earnings of $1.34 billion, or 98 cents per share, for the three-month period ended June 30. That compares with $818 million, or 68 cents per share, for the same period last year. Revenue increased 62 percent to $9.62 billion.

Analysts expected earnings of 85 cents per share on revenue of $9.19 billion, according to FactSet.

Outgoing Chairman and CEO Andrew Gould said the profits were propped up by "very strong growth" for land-based projects in the U.S. as well as a "renewed interest in exploration activity in the Gulf of Mexico."

The growth in North American drilling is happening at a time when international operations are picking up. Revenue increased during the quarter for Schlumberger operations in Latin America, Europe, Africa, the Middle East and Asia.

Gould said it will be a continuing challenge for the company "to supply both the North American and international markets with the required equipment and people." That's means profits will be up even more this year. Increased drilling activity usually benefits oil service companies by boosting the amount they can charge for rig equipment and other services.

Schlumberger increased earnings across its business segments. Pre-tax income rose 31 percent, to $602 million, for its reservoir characterization operations _ which help oil companies plan production _ 15 percent, to $538 million, for its drilling business and 16 percent, to $613 million, for reservoir production.

Rival Halliburton Co. posted a 54 percent quarterly profit increase of $739 million earlier in the week.

Gould, 64, announced this week that he will retire on Aug. 1. Chief Operating Officer Paal Kibsgaard will replace Gould as CEO. Gould, who has spent 36 years with the company, will continue to serve as board chairman until the next shareholder meeting in April.

Schlumberger shares rose $2.64, or 2.9 percent, to $93.60 in premarket trading.