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Sclumberger lost $ 7.4 billion as a “double black swan” event created the industry’s toughest market in decades.
Houston-based petroleum service provider took a $ 8.5 billion pre-tax charge as falling oil prices forced the company to write down some of its assets and cut its dividend by 75% .
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Per share, the loss was $ 5.32 per share, as revenues fell 5% year-over-year to $ 7.5 billion. Wall Street analysts polled by Refinitiv expected $ 7.52 billion in sales.
Excluding one-time charges such as impairments, Schlumberger earned 25 cents, exceeding estimates by 24 cents. Stocks rebounded from the results.
“The unprecedented global health and economic crisis triggered by the COVID-19 pandemic increasingly affected industry activity during the quarter,” said CEO Olivier Le Peuch in a statement.
“This effect was amplified at the end of the quarter by a new battle for market share between the largest oil producers in the world,” he added. “This double black swan event caused simultaneous shocks on supply and demand. “
WHAT IS A BLACK SWAN?
These shocks dropped the price of West Texas Intermediate, the US benchmark, crude oil by 67% in the first quarter, resulting in a sharp slowdown in spending and drilling activity by Schlumberger customers.
Revenues in North America fell 7% from the previous quarter to $ 2.3 billion, while international revenues fell 10% to $ 5.1 billion.
Schlumberger has experienced “a certain resilience” in its international activities, which recorded growth of 2% year-on-year. The company generated $ 784 million in cash flow, more than double the amount recorded in the same three months last year.
The company’s board of directors has cut the dividend by 75% to 12.5 cents per share as it attempts to conserve cash during the recession.
Schlumberger shares fell 65% this year until Thursday.