By Liz Hampton and Nivedita Bhattacharjee
HOUSTON (Reuters) - Schlumberger on Friday posted a fourth quarter loss on charges but beat Wall Street forecasts and offered an upbeat outlook that included the first growth in its struggling international operations in four years.
Schlumberger, the first major energy company to report this quarter, is a bellwether for oilfield services and drilling. Its forecast for broad improvements this year on higher oil prices signals a stronger recovery for producers and service companies.
"Looking at the oil market, the strong growth in demand is projected to continue in 2018, on the back of a robust global economy," said Chief Executive Paal Kibsgaard. He added that producers now predict between 15 and 20 percent growth in North American energy investments.
The world's largest oilfield services company reported $2.7 billion in charges including a $938 million write-down of its holdings in Venezuela due to economic turmoil there and more than $1.1 billion in restructuring expenses for its WesternGeco seismic business.
The charges widened Schlumberger's fourth quarter net loss to $2.26 billion, from $204 million a year earlier. Revenue rose 15 percent to $8.18 billion.
Its shares were down around one percent at $75.83 in afternoon trade.
Schlumberger on Friday said it would refocus its WesternGeco business on selling its seismic data, while exiting the land and marine acquisition segment of that business amid poor returns. The business has suffered as drilling has focused on well-defined U.S. shale fields rather than new areas.
Schlumberger also said it would remain in Venezuela despite the write offs for unpaid bills and continue to seek payment for past work there.
Excluding the writedowns, profit benefited from the year's recovery in crude prices, rising to 48 cents a share, above the average analyst estimate of 44 cents, according to Thomson Reuters I/B/E/S.
Schlumberger said quarterly results included an additional $76 million in taxes due to U.S. tax reform.
The company was upbeat about its prospects for international growth this year, underpinned by recent contract wins in Saudi Arabia, Kuwait, India and elsewhere.
"The international market will return to growth for the first time since 2014," Patrick Schorn, executive vice president for new ventures, said during its earnings call. "Projected activity growth is leading us to start the reactivation of equipment," he added.
Growth in the international market has been supported by a nearly 24 percent climb in the global Brent futures contract in the past three months.
In North America, where fourth quarter revenue rose 59 percent over a year earlier, Schlumberger said it expected to deploy new hydraulic fracturing fleets amid strong demand for pressure pumping services. The company in January acquired Weatherford International's hydraulic fracturing business, scrapping plans for a joint venture.
The recovery of global oil prices to almost $70 a barrel has given fresh legs to shale drilling in North America, positioning the United States to push oil output past 10 million barrels per day - toppling a record set in 1970.
Schlumberger also said it would move into "execution" mode to focus on generating positive cash flow for its Schlumberger Production Management (SPM) business, which invests in major oilfield projects alongside customers.
"I would characterize this as very disciplined growth going forward," said Schorn, regarding the company's strategy for the business, which has drawn investor attention because of heavy investments.
The value of its SPM business climbed to $4.1 billion in the fourth quarter, up from $2.8 billion the quarter prior, the company said.
(Reporting by Nivedita Bhattacharjee and Liz Hampton; Editing by Patrick Graham and Andrew Hay)
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