Posted: Apr 20, 2012 5:50 AM
Updated: Apr 20, 2012 5:51 AM
NEW YORK (AP) Oil services giant Schlumberger Ltd. said Friday that profit jumped almost 38 percent in the first quarter thanks to strong drilling activity in the Gulf of Mexico, north Africa and the Middle East.
The Houston company, which provides a host of services for petroleum companies, reported earnings of $1.31 billion, or 97 cents per share, for the first three months of the year. That compares with $944 million, or 69 cents per share, for the same part of 2011. Revenue increased by 21.7 percent to $10.6 billion.
Analysts were expecting earnings of 97 cents per share on revenue of $10.5 billion, according to FactSet. Shares rose about 2 percent in premarket trading.
The company said world oil demand appears to have "stabilized" and that the risk of a double-dip recession has declined.
Schlumberger said an increase in drilling for oil during the first quarter offset a slowdown in North America's natural gas fields, where decade-low natural gas prices have forced many companies to take some production offline.
Oil prices are expected to remain high. Both the benchmarks for U.S. and international crude are above $100 per barrel, even with a recent dip. Schlumberger expects any declines to be limited, which means drilling activity should remain robust. It forecasts that the number of drilling rigs should grow by more than 10 percent this year.
Sales in its oil field services increased 22 percent. Sales were flat in North America while its international business lost revenue due to winter weather and other operating issues. Its WesternGeco business, which helps companies determine the location and size of underground petroleum reserves, reported strong sales.
Rival Halliburton reported a 22.7 percent increase in first-quarter income. Baker Hughes Inc. will report next week, along with oil majors Exxon Mobil and Chevron.