* Slashes 2016 capex to $2.0 bln from $2.4 bln
* Q1 N.America pretax operating margin -0.7 pct vs. 12.9 pct
* Q1 earnings/shr 40 cents vs. estimates 39 cents
* Outlook for oil markets remains unchanged - CEO
(Adds details, analyst's comment, graphic)
April 21 (Reuters) - Schlumberger Ltd's SLB.N profit
nearly halved in the first quarter, but the fall was slightly
less than analysts estimated, as cost cuts helped cushion the
impact of the continued decline in drilling and completion
activity.
The world's No.1 oilfield services provider said its costs
to do business in North America exceeded the revenue it earned
there in the quarter, the first time it had negative margins in
the region since oil prices started falling in mid-2014.
"North America was the biggest surprise to the downside,
with negative margins, which did not occur during 2008-2009 oil
drop," Edward Jones analyst Rob Desai said.
The slump in global drilling activity reached unprecedented
levels in the latest quarter and is expected to continue
deteriorating, Schlumberger Chief Executive Paal Kibsgaard said
in a statement on Thursday.
"Our overall outlook for the oil markets remains unchanged,
with the tightening of the supply-demand balance expected to
continue during the rest of the year," Kibsgaard said.
Schlumberger, whose shares were off 0.96 percent in trading
after the bell, kicks off the earnings season for oilfield
services providers and its comments are closely watched for
trends in the oil industry.
Like its peers, Schlumberger has cuts costs and headcount
and juggled resources to try and bolster margins, moves that
have helped its profit top Wall Street's expectations every
quarter for nearly five years now, or since Kibsgaard became
CEO.
The company on Thursday lowered its 2016 capital spending
budget to $2 billion from $2.4 billion, and hinted at further
cost cuts. Its employee count has fallen to about 93,000, down
2,000 from December and 36,000 from its peak in November 2014.
Schlumberger said pretax operating margin was negative 0.7
percent in North America, meaning the cost of goods sold and
operating expenses exceeded the revenue it earned in the region.
Pretax operating margin 12.9 percent in the year-ago quarter.
Total net profit attributable to Schlumberger nearly halved
to $501 million, or 40 cents per share, in the quarter ended
March 31.
Revenue fell 36 percent to $6.52 billion. Revenue slumped 55
percent in North American and 28 percent internationally.
Analysts on average were expecting earnings of 39 cents per
share and revenue of $6.51 billion, according to Thomson Reuters
I/B/E/S.
Total pretax operating margin fell to 13.8 percent from 19.4
percent.
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Schlumberger earnings graphic http://tmsnrt.rs/1YD35Cw
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