Leaders of companies that supply the oil and gas industry are sounding less bullish than they were earlier this year, The Wall Street Journal reports.
Oil field service giant SLB—formerly known as Schlumberger—on Friday reported slightly worse-than-expected results, with revenue increasing 10% in its third quarter compared with a year earlier, below Wall Street expectations of 11% growth.
Net income was up 6%, below analyst expectations for an 11% rise. CEO Olivier Le Peuch said on a Friday conference call that customers were more cautious about spending in the quarter.
The company says that for next year, international upstream spending could grow by a low to middle single-digit percentage, while spending in North America is expected to remain flat or decline slightly.
“From where we were a year ago, there’s definitely a reduced expectation of spending growth,” says Roger Read, an equity analyst at Wells Fargo.
Overall, oil prices are down about 5% year to date and 20% over the past 12 months. The downtick is due to non-OPEC production, uncertainty around OPEC+ supply releases, weaker demand from China and softer economic growth in the U.S. and Europe.
