Schlumberger Limited (NYSE: SLB) reported a 14% increase in earnings for the second quarter of 2019 helped by lower costs and expenses as well as exclusion of the previous year’s workforce reduction charges. The bottom line came in line with the analysts’ expectations, while the top line exceeded consensus estimates. The oilfield services provider appointed Olivier Le Peuch as its executive chief and a board member, effective August 1.

Le Peuch succeeds Paal Kibsgaard, who will retire as CEO effective on August 1. Also effective on the same date, Kibsgaard will step down as Chairman and retire as a board member. Mark Papa, a current non-independent director, will become non-executive Chairman of the Board. Peter Currie will continue to serve as the Board’s Lead Independent Director.

Net income increased by 14% to $492 million or $0.35 per share. However, adjusted earnings decreased by 19% to $0.35 per share.

Schlumberger Q2 profit meets estimates, names Olivier Le Peuch CEO

Revenue declined by 0.4% to $8.27 billion. The results was benefited by double-digit growth in the Mexico & Central America GeoMarket due to high offshore exploration-led activity for the IOCs and increased Integrated Drilling Services (IDS) onshore activity.

For the second quarter, revenue from North America fell by 11% year-over-year, while that from Latin America climbed by 21%. Revenue from Europe/CIS/Africa increased by 6% and that from Middle East & Asia rose by 4%.

Drilling revenue increased by 8% as the performance was benefited from contract awards and the deployment of drilling systems and fluids technologies. However, production revenue declined by 5% due to the impact of the spring breakup in Canada and softer hydraulic fracturing pricing. Cameron revenue decreased by 4% due to reduced activity in North America.

Also read: Chewy Q1 earnings results

From a macro perspective, the company expects oil market sentiments to remain balanced. The oil demand forecast for 2019 has been reduced slightly on trade war fears and current global geopolitical tensions, but the company does not anticipate a change in the structural demand outlook for the mid-term.

On the supply side, Schlumberger continues to see US shale oil as the only near- to medium-term source of global production growth, albeit at a slowing growth rate, as E&P operators continue to transition from an emphasis on growth to a focus on cash and returns, with consequent restraining effects on investment levels. These effects, combined with the decision by OPEC and Russia to extend production cuts through the first quarter of 2020, are likely to keep oil prices range bound around present levels.

On July 17, 2019, Schlumberger’s board of directors approved a quarterly cash dividend of $0.50 per share of outstanding common stock. The dividend is payable on October 11, 2019, to stockholders of record on September 4, 2019.

Shares of Schlumberger ended Thursday’s regular session up 0.39% at $38.78 on the NYSE. Following the earnings release, the stock rose over 1% in the premarket session.

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