By Dan Molinski
The world's largest oil-field service company, Schlumberger
Ltd., said Thursday that it laid off 9,000 workers late last year,
reducing its global head count by 7%.
The company took more than $1 billion in charges for the fourth
quarter, including a $300 million charge related to downsizing its
staff of roughly 123,000. Profits for the quarter fell sharply as a
glut of oil and tepid demand for fuel drove down the price of crude
and demand for Schlumberger's services.
Unrest in Libya and Iraq and international sanctions in Russia
also took a toll on operations, the company said. And Schlumberger
also incurred restructuring costs of $800 million to write down its
fleet of ships used to gather data on underground oil and gas
reservoirs used by exploration companies.
As the first major energy company to report financial results,
Schlumberger is expected to set the tone for a sector hard hit by
plunging crude-oil prices. The company said it anticipates a drop
in spending for new oil and gas exploration this year.
Schlumberger helps oil and gas producers drill and frack wells
so they can pump more fuel from the ground. So far, those energy
companies have indicated they will spend 30% to 35% less in the
U.S. and Canada this year, said James Wicklund, an energy analyst
at Credit Suisse.
Oil prices have fallen more than 55% since June to less than $50
a barrel in the U.S. and energy companies are trying to figure out
where the bottom of the market is. Accurately forecasting how long
oil prices will stay low is no easy task, said Angie Sedita, an
analyst at UBS Securities LLC.
"There was limited forward looking commentary on either North
America or the International markets," she said of Schlumberger's
financial filing to the Securities and Exchange Commission. "Given
the early stages of the downturn we believe accurate management
guidance is challenging to impossible."
On Thursday, the company also said it would raise its quarterly
dividend by 25% to 50 cents a share. Shares in Schlumberger closed
down 2.25% at $76.63, but ticked up slightly in after-hours
trade.
Schlumberger reported a fourth-quarter profit of $302 million,
or 23 cents a share, down from $1.66 billion, or $1.26 a share, in
the prior-year period. Those results include restructuring costs.
Revenue rose 6% to $12.64 billion.
Excluding restructuring and other charges, the company's profit
rose to $1.50 a share in the quarter from $1.35 a share a year
earlier. Analysts surveyed by Thomson Reuters were expecting $1.45
a share.
Maria Armental contributed to this article.
Write to Dan Molinski at Dan.Molinski@wsj.com
Access Investor Kit for Schlumberger NV
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=AN8068571086
Subscribe to WSJ: http://online.wsj.com?mod=djnwires