Schlumberger Ltd. (NYSE: SLB) reported second-quarter 2019 results before markets opened on Friday. The oil field services firm posted adjusted diluted quarterly earnings per share (EPS) of $0.35 on revenues of $8.27 billion. In the same period a year ago, Schlumberger reported adjusted EPS of $0.43 and revenues of $8.3 billion. Second-quarter results also compare to the consensus estimates for EPS of $0.35 on revenues of $8.11 billion.

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Adjusted pretax net income in the quarter totaled $492 million, down from $594 million in the same period a year ago. An after-tax adjustment of $164 million for workforce reductions added $0.12 to second-quarter 2018 EPS.

At the end of the second quarter, Schlumberger’s backlog totaled $2.17 billion in its OneSubsea segment and $541 million in the drilling systems segment. This represents an increase of about $260 million in backlog compared to the end of the previous quarter.

Chair and CEO Paal Kibsgaard, who is retiring at the end of this month, commented:

[W]e expect oil market sentiments to remain balanced. The oil demand forecast for 2019 has been reduced slightly on trade war fears and current global geopolitical tensions, but we do not anticipate a change in the structural demand outlook for the mid-term. On the supply side, we continue to see US shale oil as the only near- to medium-term source of global production growth, albeit at a slowing growth rate, as E&P operators continue to transition from an emphasis on growth to a focus on cash and returns, with consequent restraining effects on investment levels. These effects, combined with the decision by OPEC and Russia to extend production cuts through the first quarter of 2020, are likely to keep oil prices range bound around present levels. Although the markets are well supplied from production added by projects that were sanctioned before 2015, this added supply will begin to fall in 2020 and create risk for the future as the decline rates in many mature production basins become an increasingly significant challenge.

Kibsgaard’s replacement as CEO is 32-year company veteran and current Chief Operating Officer Olivier Le Peuch, who will take over on August 1. The new non-executive chair of the board will be Mark G. Papa, former Chair and CEO of EOG Resources, who joined the Schlumberger board last October.

As if to underscore Kibsgaard’s remarks, Reuters reported Thursday that the International Energy Agency (IEA) is cutting its demand growth forecast from 1.2 million barrels a day to 1.1 million. Since the IEA’s first estimate of demand growth of 1.5 million barrels a day for this year the agency has lopped off 400,000 daily barrels.

Kibsgaard also noted that he expects international exploration and production growth of 7% to 8% year over year in 2019 on rising international rig count. North American spending on land-based projects is on track to drop by 10% this year.

Schlumberger said it expects to spend approximately $1.5 billion to $1.7 billion on capital investment, down from $2.2 billion in capex last year. The company offered no further guidance in its press release, but consensus estimates call for third-quarter EPS of $0.41 and revenues of $8.49 billion. For the full year, EPS is forecast at $1.53 on revenues of $33.24 billion.

Shares traded up about 1.3% in Friday’s premarket at $39.28. The stock’s 52-week range is $34.46 to $68.53. The 12-month consensus price target was $50.27 before results were announced. Schlumberger’s shares have dropped more than 40% in the past 12 months.

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