Schlumberger profit falls, sees no quick rebound

SCHLUMBERGER (SLB.NY)and other oilfield service companies have suffered as the pullback in oil and gas prices prompted energy producers to cancel new projects and rein in spending programs.

While oil prices have rebounded from their early 2009 lows, they remain at half the record of July 2008, while natural gas is down about 75 percent from year-ago levels.

"The current volatility in the oil price makes it unlikely that our customers will sanction any major increases in expenditures," Chief Executive Officer Andrew Gould said in a statement.

North American natural gas drilling fell to a five-year low, and although production was beginning to show declines, Gould said no rebound was likely before 2010.

Still, the company, whose view of the oil and gas industry is watched closely because of its size and global reach, warned the drop-off in spending, coupled with higher costs to find new energy supplies, could trigger a supply shortfall when growth in demand resumes.

Second-quarter net profit fell to $613 million, or 51 cents per share, from $1.42 billion, or $1.16 per share, a year earlier.

Excluding one-time charges for employee severance, earnings were 68 cents per share, above the 64 cents that analysts on average had forecast, according to Reuters Estimates.

Revenue fell 18 percent to $5.53 billion. Analysts were expecting $5.48 billion.

Revenue declined 18 percent to $4.96 billion at the oilfield services unit and fell 17 percent to $559 million at the Western Geco seismic business.

Schlumberger had cut costs by about $300 million from the first quarter and improved its liquidity by $537 million.

In trading before the market opened, Schlumberger shares were up 1.1 percent at $58.41.

At Thursday's close, the stock was up 36 percent so far in 2009, lagging a 43 percent gain for the Philadelphia oil service index .

(Reporting by Matt Daily in New York and Braden Reddall in San Francisco; Editing by Lisa Von Ahn)