What were the main drivers of revenue growth in the second quarter of 2006?

Revenue growth was driven by a combination of factors across both business segments. For Oilfield Services, growth was fueled by increased activity, higher pricing, and stronger demand for higher-margin technologies, particularly in North America, Europe/CIS/West Africa, and the Middle East & Asia. WesternGeco saw revenue increases due to higher vessel fleet utilization in Marine, increased land acquisition activity, and growth in Data Processing. The full acquisition of WesternGeco also contributed to consolidated revenue.

How did the acquisition of the WesternGeco minority interest impact the financial results?

The acquisition of the remaining 30% minority interest in WesternGeco for $2.4 billion in April 2006 significantly impacted the financial results. It led to the consolidation of WesternGeco's financials, contributing to higher overall revenue and income. The transaction was financed through a combination of cash/investments and existing credit facilities, increasing the company's debt levels. The acquisition also resulted in a substantial increase in goodwill on the balance sheet.

What is the company's outlook for the remainder of 2006?

The filing indicates a positive outlook, with management discussing strong growth, increased pricing, and operating efficiencies. The backlog for WesternGeco reached an all-time high, suggesting continued strong demand. The company also noted increased stock-based compensation expenses and ongoing relocations of corporate offices and research centers, which are expected to have associated costs but are framed within a context of overall business strength. Forward-looking statements suggest expectations for continued growth for Schlumberger as a whole and for its individual segments.

What significant charges or credits impacted the second quarter earnings?

In the second quarter of 2006, Schlumberger recorded pretax charges totaling $46 million. These included $21 million for in-process R&D related to the WesternGeco acquisition, $9 million for the liquidation of investments, $7 million for the WesternGeco visa settlement, and $6 million for other in-process R&D. These charges reduced net income by $43 million after considering minority interest.

SLB 10-Q Quarterly Report Q2 FY2006 — Revenue, Net Income, EPS

Summary

Schlumberger Limited (SLB) reported a strong second quarter and first half of 2006, demonstrating significant year-over-year growth in both revenue and net income. The company's operating revenue surged by 36% for the quarter and 35% for the six-month period, driven by robust performance in both its Oilfield Services and WesternGeco segments. This growth was underpinned by increased activity, higher pricing, and the successful integration of strategic acquisitions, most notably the full acquisition of WesternGeco. Net income saw a substantial increase, reflecting the strong revenue performance and improved operational efficiencies. The company's balance sheet remains solid, though it has taken on additional debt to fund strategic initiatives. Investors can take comfort in the company's consistent execution and its strategic positioning in a favorable market environment for oilfield services.

Key Highlights

1Total revenue for the second quarter of 2006 reached $4.69 billion, a 36% increase year-over-year.
2Net income for the second quarter of 2006 was $856.9 million, a significant increase from $482.2 million in the same period of 2005.
3Oilfield Services revenue grew by 36% year-over-year, reaching $4.13 billion in Q2 2006, with strong performance across multiple GeoMarkets.
4WesternGeco revenue increased by 47% year-over-year to $562 million in Q2 2006, driven by higher Marine, Land, and Data Processing activity.
5The company completed the acquisition of the remaining 30% minority interest in WesternGeco for $2.4 billion, consolidating full ownership.
6Diluted earnings per share for the second quarter were $0.69, up from $0.40 in the prior year.
7The company approved a new share buy-back program of up to 40 million shares.

SLB LIMITED/NV Quarterly Report for Q2 Ended Jun 30, 2006

Summary

Key Highlights

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