Schlumberger Limited (SLB) has reported its fourth-quarter and full-year 2009 results. Diluted earnings per share from continuing operations were 67 cents, compared to the Zacks Consensus Estimate of 63 cents and the year-earlier earnings of $1.03. Diluted earnings from continuing operations for full-year 2009 were $2.78 per share versus $4.50 in 2008.
Total revenue for the quarter decreased 16.4% year over year to $5.74 billion. Oilfield Services revenue was down 17% to $5.17 billion. WesternGeco revenue decreased 8% to $549 million. Total revenue for full-year 2009 decreased 16.4% year over year to $22.70 billion.
Oilfield Services revenue was down 16% to $20.52 billion. WesternGeco revenue decreased 25% to $2.12 billion. Though the quarterly Oilfield Services revenue was down year over year, it was up 4% sequentially, driven by increased deepwater and exploration activity.
All geographical areas reported improved results except Europe/CIS/Africa. North American revenue increased 6% sequentially but was 44% lower year over year, while pre-tax operating income in the region was down 35% sequentially and 95% year over year. Latin American revenue increased 5% sequentially and 2% year over year, while pre-tax operating income decreased 9% sequentially and 11% year over year.
Europe/CIS/Africa revenue was flat sequentially but fell 13% year over year, while pre-tax operating income in the region decreased 9% sequentially and 28% year over year. Middle East and Asia revenue increased 7% sequentially and decreased 10% year over year, while pre-tax operating income in the region increased 9% sequentially and decreased 13% year over year.
At WesternGeco, pre-tax operating income increased 89% sequentially and 30% from the year-earlier level. This significant sequential increase in operating income was driven by high Multiclient sales, partially offset by the impact of the lower pricing and project delays in Marine operations.
At the end of the quarter, Schlumberger had a cash balance of $4.62 billion and long-term debt of $5.16 billion, representing a debt-to-capitalization ratio of 21.2%. During the quarter, the company repurchased 7.8 million shares for a total of $500 million.
While the North American gas drilling scenario assumes a modest recovery, we do not foresee any major advancement in near-term service pricing. Moreover, we remain skeptical on natural gas activity as we believe market remains are oversupplied, with capacity being increased in 2010.
With about three-fourths of its revenue coming from markets outside North America, Schlumberger remains better positioned to cope with the struggling North American natural gas market.
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