The largest oilfield services provider, Schlumberger (NYSE: SLB), reported better-than-expected fourth-quarter earnings on Friday and, like its rivals Halliburton and Baker Hughes, expects spending and activity levels to gain momentum this year.
Schlumberger’s earnings per share (EPS), excluding expenses and credits, rose 37 percent sequentially to $ 0.22, beating Refinitiv IBES ‘estimates of $ 0.17.
Schlumberger sales also increased, sequentially by 5 percent, driven by strong activity and solid execution in both North America and international markets. Sales in North America were up 13 percent in Q4 from Q3.
The three largest oilfield services providers in the world – Schlumberger, Halliburton and Baker Hughes – all reported losses for the third quarter. Still, those losses were significantly lower than the second quarter, “the most challenging quarter in decades,” as Schlumberger CEO Olivier Le Peuch had said. Losses were lower between July and September, also due to massive cost savings after oilfield service companies laid off tens of thousands of workers.
For Q4, all three oilfield service providers reported an increase in revenues this week from Q3 and expressed optimism that oil demand, as well as drilling activity, will pick up this year. Baker Hughes posted its first quarterly profit since oil prices crashed in March, while Halliburton reported adjusted net income, with sales in North America increasing 26 percent consecutively to $ 1.2 billion.
Schlumberger expects oil demand to recover to 2019 levels by 2023 or earlier, Le Peuch said in Q4 earnings today.
“In North America, spending and activity momentum will continue to maintenance levels in the first half of 2021, albeit moderated by capital discipline and industry consolidation. Internationally, following the seasonal effects of the first quarter of 2021 and as OPEC + responds to increasing oil demand, higher spending is expected from the second quarter of 2021. The accelerated activity will extend beyond short-cycle markets and be broad including offshore, as shown in the fourth quarter, ”said Le Peuch.
By Charles Kennedy for Oilprice.com
More Top Reads from Oilprice.com: