Summary
Schlumberger Limited (SLB) reported a decrease in revenue and net income for the third quarter and nine months ended September 30, 2002, compared to the same periods in 2001. Revenue for the third quarter was $3.5 billion, down 7% year-over-year, while net income was $173 million, an 11% decrease. This decline was primarily driven by challenges in the Oilfield Services (OFS) segment, which saw a 4% revenue drop, largely due to a significant decrease in rig count, particularly in North America, and lower pricing in some areas. The SchlumbergerSema segment showed resilience, with revenue increasing by 6% year-over-year, driven by managed services and mobile communication cards, though it faced a charge for workforce reductions. Despite the revenue and income declines, the company highlighted sequential improvements in revenue for both segments and noted positive trends in specific geographic markets and technology areas within OFS, such as Well Completions & Productivity. SLB also announced the signing of an agreement to sell its Reed-Hycalog business, a move expected to be completed by year-end. Looking ahead, the company anticipates further charges in the fourth quarter related to workforce severance and potential downsizing of the WesternGeco joint venture operations. Investors should note the ongoing review of SchlumbergerSema's strategic business plan and potential impairment charges.
Key Highlights
- 1Third quarter revenue of $3.5 billion decreased 7% year-over-year, while net income was $173 million, down 11%.
- 2Oilfield Services (OFS) segment revenue decreased 4% year-over-year, impacted by a 21% decline in the M-I rig count globally, though revenues outside North America showed growth.
- 3SchlumbergerSema segment revenue grew 6% year-over-year to $896 million, demonstrating resilience despite a challenging IT services market.
- 4The company signed an agreement to sell its Reed-Hycalog drill bit technology business for $255 million cash and 9.73 million shares of Grant Prideco common stock.
- 5SLB reported a sequential revenue increase in both OFS and SchlumbergerSema segments, indicating potential signs of recovery or stabilization.
- 6Expectations for a fourth-quarter charge for employee severance costs and potential downsizing of WesternGeco operations were disclosed.
- 7Goodwill increased to $6.75 billion from $6.26 billion due to reclassification of assembled workforce and acquisitions.