A slowdown in North American onshore exploration fueled a 3.7 percent drop in Schlumberger’s fourth quarter profit over last year’s results, the company reported Friday morning.
Schlumberger reported fourth-quarter profit of $1.36 billion in 2012, or $1.02 a share, down from $1.41 billion, or $1.05 a share, for the same time period in 2011.
Earnings from continued operations for fourth quarter, $1.37 billion, reflected this slowdown, a two percent decrease from its $1.4 billion in continued operations earnings for the same period last year.
But despite a slow fourth quarter, Schlumberger’s aggressive pursuit of Gulf of Mexico opportunities and its Russian and West African exploration activity have paid off for the year as a whole: the company earned $5.47 billion in 2012 from continued operations, up 13.5 percent from $4.73 billion for 2011.
Schlumberger reported $11.17 billion in revenue for the fourth quarter, up five percent from its $10.61 billion third quarter revenue and eight percent over $10.3 billion fourth quarter 2011 results. The revenue growth has been driven by international exploration and production in the Gulf of Mexico and other international markets.
Schlumberger has benefited from the explosion in tight oil and shale gas exploration in North America over 2012 as a whole, but a slowdown in services activity has resulted in weaker end of the year performance than Schlumberger had earlier estimated, lowering its operating margins.
“In North America, we demonstrated our resiliency from the challenges of the land markets by growing the business by more than $1 billion, or 9%, aided by our strong position in the offshore market, particularly in the US Gulf of Mexico,” said Schlumberger CO Paal Kibsgaard at the Friday morning earnings conference.
Kibsgaard said that contract delays in the Middle East and slowdowns in activity in Canada and North America also had lowered end of the year results.