Schlumberger profit tops view, shares up

Schlumberger profit tops view, shares up

Schlumberger Ltd., the world’s largest oilfield services company, said on Friday its fourth-quarter earnings rose 71 percent on a strong performance in its seismic business and forecast “significant” growth in 2007.

Income from continuing operations rose to $1.13 billion, or 92 cents per share, from $660 million, or 54 cents per share, a year earlier.

The earnings easily topped analysts’ average expectation of 85 cents per share, according to Reuters Estimates.

Investors pushed shares of Schlumberger more than 2 percent higher in early electronic trading.

Recent declines in crude oil and natural gas prices have raised concerns among investors that the 2-1/2 year surge in spending by oil and companies could begin winding down. But Schlumberger said the era of cheap energy prices had ended, and higher levels of investment were needed to secure supplies.

“While we remain of the opinion that there is no overall shortage of oil and gas reserves, the world is realizing that the period of cheap hydrocarbon energy has ended and new and higher sustained levels of investment are necessary to meet demand and guarantee future supplies,” Chief Executive Andrew Gould said in a statement.

Gould also said the company expects “significant” growth in 2007, especially in the Eastern Hemisphere.

Revenue for the quarter rose 33 percent to $5.35 billion from $4.02 billion.

“It was another very solid quarter,” Mark Urness, analyst at Calyon Securities, said. “The big upside again was at Western Geco, which shows future exploration activity is going to be up a lot.

At Western Geco, Schlumberger’s fast-growing seismic unit, pretax operating profits jumped to $273 million from $110 million as revenues increased to $721 million from $464 million.

Pretax profit at the oilfield services unit rose to $1.32 billion from $852 million a year earlier, while revenue was up to $4.63 billion from $3.57 billion.

Shares of Houston-based Schlumberger have fallen about 7 percent so far this year, versus a drop of more than 6 percent in the broader Philadelphia Oilfield Services Sector Index Schlumberger stock rose 2.6 percent to $59.40 in early electronic composite trading from the close of $57.90 on the New York Stock Exchange on Thursday.

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