SHARE
Image courtesy of Schlumberger.

Schlumberger saw its third quarter income fall by nearly half from a year ago as low oil prices still hover around the $50 per barrel mark.

SLB income from continuing operations fell to $989 million, a 49 percent year-over-year drop, while pre-tax operating income dipped 11 percent from the previous quarter to $1.52 billion.

Diluted earnings per share slid to $0.78 per share from $0.88 per share last quarter.

The Houston-based company booked $8.47 billion in third quarter revenue, a 6 percent dip from the previous quarter and a 33 percent fall from the same quarter last year.

The company did not take any charges or credits this quarter.

Schlumberger’s North America revenue fell to $2.27 billion in the third quarter, a 47 percent drop from the $4.25 billion the company booked during the same quarter last year.

Pretax operating income in North America came in at $202 million, a 17 percent sequential fall and a 76 percent year-over-year slide.

“Revenue declined on land due to persistent pricing pressure, while Alaska revenue declined as exploration projects were completed.  In the US Gulf of Mexico, revenue fell slightly on lower multiclient seismic sales while higher technology sales limited the impact of pricing concessions,” the company said.

Schlumberger added that the trend of exploration rigs transferring to drilling and completion activities continued in the third quarter.

The company fared better in the international market, with international revenue falling only 27 percent year-over-year to $6.06 billion.

International pretax operating income dipped to $1.44 billion, a 10 percent drop from the previous quarter and a 29 percent fall from the same quarter last year.

The decline in international areas revenues was tied to “customer budget cuts and continued pricing concessions,” the company said.

“In light of conservative customer budgets for next year, we are therefore entering another period during which we will continually adjust resources in line with activity, as the recovery now appears to be delayed,” Schlumberger chairman and CEO Paal Kibsgaard said.

The company’s drilling group posted a pretax operating income of $604 million in the third quarter on $3.25 billion in revenues, down from $1.04 billion in pretax operating income and $4.82 billion in revenues during the same period last year.

Revenue from the company’s production group ticked down by 5 percent from last quarter to $2.95 billion, a 35 percent fall from the third quarter of 2014.

The production group’s pretax operating income dropped to $327 million, a 61 percent decline from the same quarter last year.

The company ended the quarter with a free cash flow of $1.7 billion, including about $150 million of severance payments.

“The business environment deteriorated further in the third quarter. However, the cost reduction actions we took in previous quarters and the acceleration of our transformation program enabled us to protect our financial performance in what is shaping up to be the most severe downturn in the industry for decades,” Kibsgaard said.