The Dividend Daily

Oil and gas services company Schlumberger Limited (SLB) on Friday posted a 48% decline in third quarter profit, hurt by lower revenue amid an oil industry drilling slump.

The Houston-based company reported third quarter net income of $789 million, or 65 cents per share, compared with $1.54 billion, or $1.25 per share, in the year-ago period. Revenue fell 25% from last year to $5.43 billion.

On average, Wall Street analysts expected a lower profit of 63 cents per share, on matching revenue.

CEO Andrew Gould commented that “In North America, we feel the current slight recovery in drilling is fragile and not likely to significantly improve service activity and pricing until late 2010.”

Schlumberger shares fell 42 cents, or -0.6%, in premarket trading Friday.

The Bottom Line
We have avoided the shares of SLB since we began our June coverage, when the shares were trading at $101.94. The company has a 1.45% dividend yield, based on last night’s closing stock price of $57.77. The stock has technical support in the $62 price area. If the shares can continue their recent ascent, we see overhead resistance around the $75-$76 price levels. We would remain on the sidelines for now.

Schlumberger Limited (SLB) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.4 out of 5 stars.

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