Schlumberger Limited. (NYSE:SLB) said that its earnings for the second quarter plummeted 30 percent due to weak sales, as the oil-services segment was hurt by low oil prices. The company said that it earned $1.12 billion, or 88 cents per share for the quarter, well below $1.6 billion, or $1.21 per share, one year ago.
Revenue came in at $9.01 billion for the quarter, down 25 percent from the same period last year. Analysts surveyed by Thomson Reuters were looking for a profit of 79 cents per share on $8.97 billion in revenue. Q2 revenue in North America plunged 39 percent. The company reported that revenue dropped 19 percent for its operations outside North America.
CEO at Schlumberger, Paal Kibsgaard is expecting investment by oil production companies to decrease further in 2015 than previous estimates. Spending in North America is anticipated to fall by more than 35 percent, as compared to a previous prediction for a drop of more than 30 percent, mainly due to decreased land activity and rise in pricing pressure.
The company also expects investment to drop more than 15 percent in the international markets, as compared to its previous forecast of about 15 percent decline. Schlumberger and its competitors have been engaged in trimming expenses, mainly due to low demand for their services from oil production companies fueled by low price for crude.
Kibsgaard said that total pretax operating margins were sustained, in spite of much more difficult market conditions, far better than earlier downturns as the company proactively managed expenses and resources, wisely navigated the commercial landscape, and accelerated its transformation program.
Rivals including Baker Hughes and Halliburton have also been cutting employees in the last few quarter. Halliburton is set to release its financial results for the second quarter on Monday, while Baker Hughes plans to post results on Tuesday.
