How did the different business segments perform?

The Oilfield Services segment demonstrated robust growth, with revenue up 8% year-over-year and pretax operating income increasing by 20%. However, the WesternGeco segment faced significant challenges, reporting a 34% revenue decline and a pretax operating loss, attributed to a weak seismic data market. SchlumbergerSema saw a 6% increase in revenue year-over-year, though it is slated for divestiture.

What is the strategic significance of the announced sale of SchlumbergerSema?

The agreement to sell the majority of SchlumbergerSema to Atos Origin is a strategic move aimed at streamlining the company's portfolio. While Schlumberger will retain certain specific activities, this divestiture signals a focus on its core oilfield services business and potentially provides capital for future investments or debt reduction.

What is the company's outlook given the mixed results?

Excluding the substantial charges, income from continuing operations showed a year-over-year increase, suggesting underlying operational strength, particularly in Oilfield Services. The company is navigating challenges in the WesternGeco segment and is actively reshaping its business through strategic divestitures like SchlumbergerSema. Investors should monitor the integration of the Atos Origin transaction and the performance of the core Oilfield Services business.

SLB 10-Q Quarterly Report Q3 FY2003 — Revenue, Net Income, EPS

Q: What caused the net loss in the third quarter of 2003?

The company reported a net loss of $55.3 million in the third quarter of 2003 primarily due to significant charges. These included a $205 million impairment charge on its WesternGeco multiclient seismic library and an $86 million charge related to the extinguishment of certain European bonds. These charges overshadowed the underlying operational performance.

Summary

Schlumberger (SLB) reported a net loss of $55.3 million for the third quarter ended September 30, 2003, a significant shift from the $172.8 million net income in the prior year's third quarter. This loss was largely attributable to substantial charges, including a $205 million impairment charge on its WesternGeco multiclient seismic library and an $86 million charge related to the extinguishment of European debt. Excluding these charges, income from continuing operations was $242 million, or $0.41 per share, an increase from $168 million, or $0.29 per share, in the prior year, indicating underlying operational resilience. Revenue for the quarter saw a modest increase of 3.5% to $3.51 billion, driven primarily by the Oilfield Services segment. However, the WesternGeco segment experienced a significant revenue decline of 34% due to weakness in the seismic data market. The company also announced the upcoming sale of the majority of its SchlumbergerSema businesses to Atos Origin, a strategic move to streamline operations. Management highlights the operational strength of Oilfield Services despite some regional headwinds and a challenging environment for WesternGeco.

Key Highlights

1Reported a net loss of $55.3 million for Q3 2003, a significant decline from $172.8 million net income in Q3 2002, primarily due to charges.
2Excluding charges, income from continuing operations was $242 million ($0.41/share) in Q3 2003, up from $168 million ($0.29/share) in Q3 2002, indicating underlying operational improvement.
3Total revenue increased by 3.5% to $3.51 billion in Q3 2003 compared to $3.39 billion in Q3 2002.
4Oilfield Services segment showed strong performance with revenue up 8% year-over-year and pretax operating income up 20%.
5WesternGeco segment experienced a significant revenue decline of 34% and a pretax operating loss of $36 million, impacted by weakness in the seismic data market.
6Announced a binding agreement to sell the majority of SchlumbergerSema businesses to Atos Origin, expected to close in January 2004.
7Recorded significant charges in Q3 2003, including a $205 million multiclient seismic library impairment and $86 million in debt extinguishment costs.

SLB LIMITED/NV Quarterly Report for Q3 Ended Sep 30, 2003

Summary

Key Highlights

Frequently Asked Questions