On the top line, revenues were unchanged yr/yr at $8.18 bln, slightly beating expectations. Total company sales were flat yr/yr and fell 4% sequentially. Production revenue of $12.4 bln increased 17%, while Drilling revenue of $9.3 bln improved 10%.
The q/q decline was driven by lower activity and pricing for most production-and Cameron-related businesses in North America. Overall, North America sales fell 12% from the prior quarter and were flat yr/yr. International sales were up sequentially and yr/yr.
North America made up 34.5% of total company sales in the fourth quarter with international sales making up the other 65%.
Weaker sales from OneSubsea also hurt the top line. However, the company says it's near the cycle trough of backlog-driven activity, possibly one item helping give shares a boost this morning.
The recent slump in oil prices, as well as overall volatility, has brought on additional uncertainty to the company's 2019 outlook and industry exploration and production (E&P) spending.
However, the company has at least a modestly positive outlook on oil prices as it expects to see a more positive supply/demand balance leading to a gradual recovery during the year, the OPEC+ supply cuts working, lower U.S. shale oil production on lower overall activity levels. The company also sees the Iran export sanctions expiring, without renewal, and the U.S. and China continuing to work towards a solution with their ongoing trade wars as key drivers as well.
Looking ahead, the company is, despite the current E&P sentiment, seeing clear signs that E&P investments are beginning to normalize.
For now, Schlumberger is set to spend less money this year, setting its 2019 capital expenditures guidance at $1.5-1.7 bln, much lower than the $2.2 bln that was spent in 2018.
Even with where current oil prices are, the company still expects to see solid, single-digit growth in international markets. In North America, higher capital costs and aligning investments closer to free cash flow has created more uncertainty to drilling and production activity.