10-QPeriod: Q3 FY2009

SLB LIMITED/NV Quarterly Report for Q3 Ended Sep 30, 2009

Filed October 28, 2009For Securities:SLB

Summary

Schlumberger (SLB) reported its third quarter 2009 results, showing a significant year-over-year decline in revenue and net income, reflecting the challenging global economic environment and its impact on the oil and gas industry. Total revenue for the quarter was $5.43 billion, down from $7.26 billion in the same period of 2008. Net income attributable to Schlumberger was $787 million, or $0.65 per diluted share, compared to $1.526 billion, or $1.25 per diluted share, in the prior year. Despite the overall downturn, the company's Oilfield Services segment revenue remained flat sequentially, indicating some stabilization. However, the WesternGeco segment experienced a notable sequential and year-over-year decline in revenue and profitability. Management indicated an outlook for continued stabilization of global activity, with potential modest increases in spending for oil exploration, while gas markets remain oversupplied. The company also highlighted its financial position, with approximately $4.9 billion in cash and investments and sufficient liquidity for at least the next twelve months.

Financial Statements
Beta

Key Highlights

  • 1Revenue for Q3 2009 decreased 25% year-over-year to $5.43 billion, reflecting a challenging market for oilfield services.
  • 2Net income attributable to Schlumberger decreased 48% year-over-year to $787 million ($0.65 diluted EPS) in Q3 2009.
  • 3Oilfield Services segment revenue was flat sequentially, showing signs of stabilization, but down 22% year-over-year.
  • 4WesternGeco segment revenue declined significantly, down 48% year-over-year and 17% sequentially, indicating continued weakness in seismic services.
  • 5The company recorded $207 million in after-tax charges in Q2 2009 related to workforce reductions and postretirement benefits, which impacted year-over-year comparisons.
  • 6Schlumberger maintained a strong liquidity position with $4.9 billion in cash and investments and $2.8 billion in available credit facilities as of September 30, 2009.
  • 7The company's outlook suggests continued stabilization of global activity with potential modest increases in oil exploration spending, while gas markets remain oversupplied.

Frequently Asked Questions

The primary driver was the global economic downturn and its direct impact on oil and gas exploration and production spending by Schlumberger's customers. This led to reduced activity and pricing pressure across most of the company's services and geographic regions, particularly in North America.

The Oilfield Services segment showed signs of sequential stabilization with flat revenue, though it was down year-over-year. The outlook for Oilfield Services is for continued global activity stabilization, with potential modest increases driven by oil prices, but gas markets remain oversupplied. The WesternGeco segment experienced significant declines in both sequential and year-over-year revenue and profitability, with improvement dependent on fourth-quarter multiclient sales.

Schlumberger reported approximately $4.9 billion in cash and investments as of September 30, 2009. The company also had $2.8 billion in unused committed credit facilities. Management believes these resources are sufficient to meet future business requirements for at least the next twelve months, indicating a solid liquidity position despite the challenging operating environment.

Yes, in the second quarter of 2009, Schlumberger recorded $207 million in after-tax charges related to workforce reductions and postretirement benefit curtailments due to the slowdown in the oilfield services sector. These charges are important to consider when comparing year-over-year performance.