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NEW YORK (AP) - Schlumberger said Friday that it expects energy demand will increase, but slowly, as countries recover from a recession that slashed its third-quarter profits by 48 percent.
The Houston-based oil field services company was hit hard this year as crude prices sagged and drilling companies idled half of all rigs in the United States.
But Schlumberger Chairman and CEO Andrew Gould said that government stimulus money has hastened the recovery of a number of industries.
"The worst, provided the economy continues to show signs of recovery, is behind us," Gould told investors on a conference call.
Schlumberger Ltd. reported net income of $787 million, or 65 cents per share, for the third quarter. Schlumberger rival Halliburton Co. reported a 61 percent drop in third-quarter profits last week.
The company said demand for oil and gas will be limited by high unemployment and a worldwide glut in oil and natural gas. Gas drilling in North America has increased slightly, but Schlumberger warned that recovery is "fragile," and that service activity and prices won't improve very much until late 2010.
Earlier this year, Schlumberger had expected oil drilling to decline in 2010. But Gould said the jump in crude prices may prompt some some customers to keep drilling. Crude prices, which fetched an average of $59.80 in the second quarter, have soared to $82 a barrel this week.
"If it stays stable at this high level for the next six months, they will change their plans," Gould said.
Schlumberger's revenue fell 25 percent compared with the year-ago quarter, to $5.43 billion. That missed analyst estimates of $5.48 billion.
However, the company said its results held steady compared with the second quarter of 2009. Oil field service revenue ticked down to $4.95 billion from $4.96 billion. Most of the increase in gas drilling came from Canada.
North American revenue was unchanged at $823 million, while revenue from Europe, Russia and Africa held steady and $1.78 billion. Latin American revenue and Middle East and Africa revenue both slipped 6 percent, to $1.07 billion and $1.23 billion respectively.
Schlumberger shares gave up $2.89, or 4.2 percent, to $65.71 in morning trading.
Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
