Oilfield services giants Schlumberger and Halliburton are continuing to look to markets outside of North America for activity growth this year and next as they turned in differing financial performances in the second quarter.

Schlumberger, which also this week revealed a change of chief executive, posted net profit of $492 million in the three months to the end of June, up from $430 million a year earlier, and from $421 million in this year’s first quarter.

By contrast, Halliburton made a net profit of $77 million, well down on last year’s second quarter of $508 million and even the $152 million in the first three months of this year.

Schlumberger’s second-quarter revenues were $8.27 billion, relatively flat on the $8.3 billion a year ago but up on the $7.88 billion in the first quarter.

Halliburton’s top line was $5.93 billion, lower than the $61.5 billion 12 months earlier but ahead of the $5.74 billion in the first quarter.

Houston-based Halliburton’s bottom line in the second quarter was impacted by $247 million in impairments, which included $58 million in severances as the company rearranged its North America management structure and cut 8% of its North America workforce in the three months to the end of June.

In the latest quarter, international revenues were up 6% sequentially, with Halliburton saying momentum is building and activity should continue to improve into next year.

For Schlumberger, drilling revenues of $2.4 billion were up 6% sequentially, driven by stronger international activity but negated somewhat by a weaker North America land market.

Reservoir characterisation revenues of $1.6 billion were up 7% sequentially, driven by higher international wireline services activity and multiclient sales.

The top line was, however, pared back by a 5% decline in the US land rig count and spring break-up in Canada.

Schlumberger chief executive Paal Kibsgaard, who will step aside next month as current chief operating officer Olivier Le Peuch takes the reins, said he sees international exploration and production investment growing between 7% and 8% this year, whereas North America onshore could see a 10% decline.

“For the first time since 2012 and 2013, we see high and single-digit growth in the international markets, signalling the start of an overdue and much needed multi-year international growth cycle,” Kibsgaard said.

“On the supply side, we continue to see US shale oil as the only near to medium-term source of global production growth,” he continued, although adding that the North America mergers and acquisitions market continues to focus on cost discipline over growth.

Similarly, Halliburton chief executive Jeff Miller looked to markets outside of North America for short-term activity growth potential. Miller said he is encouraged by the number of final investment decisions in international markets that will see projects start off in 2020 and 2021.

Asked on an analyst call if he can see a return to double-digit growth in international markets next year, Miller said: “There is no reason to believe that is not possible” — although cautioning that it is too early to make any definitive call.

Miller said Halliburton has been stacking equipment in the US onshore market and will continue to do so, meaning he expects lower revenues but higher margins from the sector.

Schlumberger’s Le Peuch echoed that sentiment, saying the company would stack some of its US land fleet, where it expects a similar activity trough in the fourth quarter as happened late last year, followed by a rise at the start of 2020.

“We have done it last year. We’ll be agile. We’ll be certainly stacking some equipment. We’ll be going and doing what is necessary to withstand this trough, but we are ready for it,” he said.

Analysts at investment bank Cowen & Company said of Schlumberger’s results: “The solid trajectory for international is helpful, but Schlumberger is not immune to slowing US activity… we do wonder if (its) third-quarter outlook is conservative as we think the company is taking great care to keep expectations grounded.”

Weekly

Mixed bag for services giants over last quarter