Schlumberger Limited reported results for the third quarter of 2015. North America revenue fell 4% sequentially.
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Schlumberger chairman and CEO Paal Kibsgaard said, “Schlumberger third-quarter revenue decreased 6% sequentially driven by a continuing decline in rig activity and persistent pricing pressure throughout our global operations.
"North America revenue fell 4% sequentially as we focused on balancing margins and market share, while international revenue dropped 7% due to customer budget cuts, activity disruptions, and service pricing erosion.
“The business environment deteriorated further in the third quarter. However, the cost reduction actions we took in previous quarters and the acceleration of our transformation program enabled us to protect our financial performance in what is shaping up to be the most severe downturn in the industry for decades.
"As a result of our actions, we have been able to deliver pretax operating margins well above those seen in any previous downturn and we have continued to generate significant liquidity with free cash flow of $1.7 billion in the third quarter, representing 170% of earnings.
“During the first nine months of 2015, our year-on-year revenue has dropped by 34% in North America, and 18% internationally. In spite of the size of these declines, our decremental operating margins over the same period have been limited to 34% in North America, and 23% internationally. These figures continue to be substantially better than those we delivered in the 2009 downturn.
“Among the business segments, Drilling Group revenue fell 7% sequentially during the third quarter driven by weakening drilling activity and by persistent pricing pressure in both North America and the International Areas.
"Production Group and Reservoir Characterization Group revenues each declined 5% as activity and pricing for pressure pumping services on land in North America continued to drop and as demand for exploration-related products and services decreased further internationally. ■