Oil field services giant Schlumberger (NYSE:SLB) confirmed yesterday that its gross profit for the full 2008 fiscal year would come in below analysts" estimates. The stock closed off about 3% yesterday and shares are down again today. This is also having an impact elsewhere.
Schlumberger’s CEO and chairman blamed the lowered forecast on "asevere global economic downturn," but noted that "the fundamentals ofour industry are sound." The company provided no other details. Infact, that’s pretty much the whole press release.
Analysts had been anticipating EPS of $1.30 for the fourth quarter and$4.76 for the whole year. The company gave no range nor even anypointer to the impact on EPS.
With crude oil prices in the $40s now, this slowdown could strike aheavy blow on services companies like Schlumberger. At that price, itsalmost better for oil companies to leave the oil in the ground and waitfor the economy to revive.
As shares have already lost well over 50% of their peak, this stock is only down about 1% at $42.10 early this morning.
December 4, 2008