Schlumberger Ltd. (SLB) announced better-than-expected profit for the first quarter, citing balance in global oil supply and demand. The company also expects investments in exploration and production to increase nearly 5 percent worldwide.
Oilfield service companies took advantage of a rise in U.S crude prices CLc1 to nearly %67 per barrel, though provider like Halliburton and Schlumberger had notified investors about freezing weather in some part of the U.S and frack sand delivery delays, which would negatively affect results in the first quarter.
Earnings were also affected by overcapacity in the pressure pumping market. Chief Executive Officer, Paal Kibsgaard warned the shale industry could experience production challenges from drilling adjacent wells that would lead to lower output per well.
Overall, Schlumberger reported earnings of $525 million, or 38 cents a share for the quarter, up from $279 million, or 20 cents a share in the same period last year. On an adjusted basis, earnings rose to 38 cents a share, beating the average analysts’ estimate of 37 cents a share.
Revenue for the quarter came in at $7.83 billion, up from $6.89 billion in the comparable quarter, one year ago.
Revenue from North America jumped about 52 percent to $2.84 billion. Though, the overall expenses of manufacturing products and delivering services jumped about 12 percent to $6.80 billion. Comparatively, revenue plummeted in Latin America due to delay in a project in Ecuador and limited activity in Argentina and Venezuela.
Revenue from international operations slightly moved down to $4.88 billion.
The Texas-based oilfield services company is seeing growth in the pressure pumping market in North America but warned that it ability to increase prices would be limited due to capacity additions.
Schlumberger expects to add 1 million extra hydraulic horsepower in 2018, though deployed lesser frack fleets than expected amid softer pricing and deployments by rivals.
Despite better-than-expected first-quarter earnings, Schlumberger shares fell 1.49 percent to $69.23 in the last trading session.