Schlumberger reports a net loss of £2.69 billion in Q2

Schlumberger (NYSE: SLB) revealed to have swung to a loss of £2.69 billion in the second quarter as compared to £385 million of net income in the same quarter last year. In comparison, its net loss in the first quarter was noted at £6.48 billion.

Shares of the company opened more than 1% up on Friday and dropped roughly 2% on market open. At £15.18 per share, Schlumberger is currently 50% down year to date in the stock market after recovering from an even lower £9.43 per share in March. Learn more about how to invest in the stock market.

Schlumberger’s Q2 financial results versus analysts’ estimates

According to FactSet, experts had forecast the company to print £4.21 billion in revenue in the second quarter. Their estimate for loss per share was capped at 0.78 pence. In its report on Friday, Schlumberger fell shy of the estimate for revenue posting a lower £4.19 billion in Q2, but its earnings per share came in stronger than expected at 3.91 pence.

On a year over year basis, the oilfield services company recorded a 35% decline in its revenue. Schlumberger launched oil and gas data management service and downhole reservoir testing in June. According to CEO Olivier Le Peuch:

“This has probably been the most challenging quarter in past decades. Revenue tanked 28% versus Q1 caused by the unprecedented fall in North America activity, and international activity drop due to downward revisions to customer budgets accentuated by COVID-19 disruptions. This speaks volumes about an industry confronted with historic oil demand and supply imbalances caused by demand destruction from the global COVID-19 containment effort.”

The company generated a 48% lower revenue in North America in the second quarter as compared to Q1. International revenue, on the other hand, tanked 60% in Q2 versus the first quarter. The CEO also highlighted that Schlumberger’s business in Africa and Latin America performed the worst in the recent quarter due to a sharp decline in deepwater activity and the Coronavirus restrictions.

Schlumberger wants to permanently cut £1.17 billion of costs

The Houston-based firm is currently committed to restructuring that includes streamlining management, focusing operations on five key basins, and creating four divisions to cover 17 product lines.

In a bid to shore up finances, the company also plans on laying off about 21,000 of its workers. Schlumberger aims at permanently cutting £1.17 billion of costs.

At the time of writing, the American oilfield services company is valued at £21.07 billion.