Schlumberger to Cut 10,000 More Jobs after Bad 4th Quarter

January 2016, Vol. 243, No. 1

HOUSTON (AP) — Schlumberger said Thursday it lost more than $1 billion and slashed another 10,000 jobs in the fourth quarter as tumbling energy prices took their toll on the world’s largest oilfield services company.

Like others in the industry, Schlumberger has been hard hit by the downturn in the energy sector and it warned that it doesn’t expect a turnaround soon.

It said it streamlined costs and cut 10,000 jobs during the last three months of 2015 “in anticipation of extended activity weakness in the first half of 2016.” The company, which has principal offices in Paris, Houston, London and The Hague, had announced at least 20,000 job reductions earlier in 2015 and currently employs about 105,000 people.

Amid a glut, crude prices are down about 38% and natural gas prices are down about 27% from a year ago. The downturn has led energy companies to slash thousands of jobs over the past year. Earlier Thursday, Southwestern Energy, the third-largest natural gas producer in the U.S., said it will cut 1,100 jobs, about 44% of its workforce.

Schlumberger Chairman and CEO Paal Kibsgaard noted the number of rigs exploring on land for oil and gas in the U.S. fell to fewer than 700 at the end of 2015, down 68% from the 2014 peak.

“The decrease in land activity was the sharpest seen since 1986,” he said. He added that “massive over-capacity in the land services market offers no signs of pricing recovery in the short to medium term.”

Schlumberger’s fourth-quarter results were hurt by a 39% drop in revenue and huge accounting charges. It posted a loss of $1.02 billion, or 81 cents per share. Earnings, adjusted for non-recurring items and asset impairment costs, came to 65 cents per share.

The results still topped Wall Street expectations. The average estimate of 18 analysts surveyed by Zacks Investment Research was for adjusted earnings of 63 cents per share.

Schlumberger posted revenue of $7.74 billion in the period, which fell short of Street forecasts. Twelve analysts surveyed by Zacks expected $7.79 billion. A year earlier its revenue totaled $12.64 billion.

Schlumberger’s shares are down 25% in the past year, and the company said its board authorized the repurchase of up to $10 billion in stock. In after-hours trading, the stock added 37 cents to $61.80

Schlumberger agreed over the summer to acquire Cameron International Inc. in a deal then worth $12.71 billion in cash and stock. It said Thursday it expects to close the transaction during the first quarter.

For the year, the company reported profit of $2.07 billion, or $1.63 per share. Revenue was reported as $35.48 billion.

Find articles with similar topics
, ,