Schlumberger, the world's largest oilfield services company, reported a sharp decline in fourth quarter profits relating to lower expected exploration spending as a result of the plunge in crude oil prices.
The Houston, Texas-based company reported a profit of USD 302 million, or 23 cents per share, down from USD 1.66 billion, or USD 1.26 per share, a year ago. Fourth quarter revenue rose six percent from a year ago to USD 12.64 billion.
Wall Street analysts expected earnings of USD 1.46 per share and revenue of USD 12.72 billion.
The plunge in oil prices (a barrel of US crude was down to USD 46.28 per barrel Thursday), has put pressure on the entire sector to cut costs.
"In this uncertain environment, we continue to focus on what we can control," said CEO Paal Kibsgaard. "We have already taken a number of actions to restructure and resize our organization that has led us to record a number of charges in the fourth quarter." Included in the charges, a USD 296 million charge relating to the layoff of approximately 9,000 people. The company currently employs 120,000 people across the globe. Other companies like Shell and Pemex have similarly made cuts to their workforce.
It also recorded a USD 806 million charge for the restructuring of its WesternGeco marine seismic fleet in an effort to lower operating costs.
Excluding charges, net income was USD 1.94 billion, or USD 1.50 per share, up nine percent from a year ago.
Driving Schlumberger's top-line growth was a 19 percent rise in revenue from North America; International revenue ticked up just one percent. Schlumberger noted that strength in the Middle East and Asia was partially offset by a significant decline in revenue from sanctioned Russia and conflict-ridden Libya.
In a separate release Thursday, the company announced plans to raise its dividend by 25 percent. It also said it repurchased 12.1 million shares during the quarter, at a total value of USD 1.1 billion.
Schlumberger shares are down 10 percent over the last 12 months, beating the 20 percent decline for the oil and gas sector, and edged up 0.8 percent to USD 77.25 in after-hours trading.