Schlumberger Ltd.’s fourth-quarter earnings rose 36% as a global drilling frenzy continued despite fears about the global economy.
The company said oil consumption and oil field activity will continue to grow, driven by relatively high energy prices and large oil companies’ need to grow their reserves, despite uncertainty surrounding economic recovery in the U.S. and Europe.
Schlumberger, like other large oil field service providers, faces the specter of a major reduction in natural gas-directed drilling in North America, as prices for the commodity have reached 10-year lows due to a glut caused by overproduction and lackluster demand. Any reductions in activity, Schlumberger said in a statement, will be “short-lived,” although the company said it was “building the required flexibility” into its plans.
The world’s largest oil field services company, Schlumberger is budgeting $4.5 billion in capital expenditures for 2012, up from $4 billion in 2011.
Analysts with Tudor Pickering said Schlumberger scored a “modest beat” of Wall Street expectations.
Activity was strong in North America, where revenue more than doubled from a year earlier, led by high-technology services in the deepwater Gulf of Mexico, where activity has resumed.
But the company’s international performance also has been improving. Schlumberger resumed drilling activity in Libya during the fourth quarter, since the country’s civil war succeeded in toppling Moammar Gadhafi as its leader. The company also continues to sell services in Mexico and to provide technology for shale rock formation drilling in Argentina.
Schlumberger reported a profit of $1.41 billion, or $1.05 a share, up from $1.04 billion, or 76 cents a share, a year earlier. Excluding merger and integration costs and the write-off of assets in Libya, earnings from continuing operations rose to $1.11 a share from 85 cents a year earlier.
Revenue rose 21% to $10.97 billion.
Analysts polled by Thomson Reuters had forecast earnings of $1.09 a share and revenue of $10.78 billion.
