Schlumberger Ltd. (NYSE: SLB) reported third-quarter 2019 results before markets opened on Friday. The oil field services firm posted adjusted diluted quarterly earnings per share (EPS) of $0.43 on revenues of $8.54 billion. In the same period a year ago, Schlumberger reported adjusted EPS of $0.46 on revenues of $8.5 billion. Third-quarter results also compare to the consensus estimates for EPS of $0.40 on revenues of $8.5 billion.

The company took a $12.7 billion pretax charge that it said was “driven by market conditions. This charge is almost entirely noncash and primarily relates to goodwill, intangible assets, and fixed assets.” On a GAAP basis, Schlumberger posted a net loss of $11.38 billion ($8.22 per share). Adjusted pretax net income in the quarter totaled $596 million, down from $644 million in the same period a year ago.

CEO Olivier Le Peuch, who replaced Paal Kibsgaard on August 1, had warned in September that Schlumberger would take such a writedown in the third quarter as the company shifted from its former strategy of taking equity positions in oil and gas assets and adopting a “focus on the company’s strength in digitization of oil and gas exploration and development.”

Le Peuch noted:

This quarter’s results reflected a macro environment of slowing production growth rate in North America land as operators maintained capital discipline, reducing drilling and frac activity. Our year-to-date high single-digit international revenue growth continues to be underpinned by international investment levels. Market uncertainty, however, is weighing on future oil demand outlook in a climate where trade concerns are seen as challenging global economic growth.

Le Peuch also commented on the company’s new strategy:

As we move forward, our vision is to define and drive high performance. Simply put, we want to be the performance partner of choice for the benefit of our customers and our industry. Underpinned by the elements of our strategy, Schlumberger is favorably positioned to achieve superior margin expansion, increased return on capital, and growth in free cash flow.

At the end of the third quarter, Schlumberger’s backlog totaled $1.82 billion in its OneSubsea segment and $496 million in the drilling systems segment. This represents a decrease of about $393 million in total backlog compared to the end of the previous quarter.

Schlumberger said it expects to spend approximately $1.6 billion to $1.7 billion on capital investment, down from $2.2 billion in capex last year. The company did not offer further guidance in its press release, but consensus estimates call for third-quarter EPS of $0.40 and revenues of $8.52 billion. For the full year, EPS is forecast at $1.47 on revenues of $33.19 billion.

The main thrust of the strategy Le Peuch outlined in September is driving down costs through digitization and shedding nonperforming businesses in a push to boost returns. To that end, cash flow from operations totaled $1.75 billion in the quarter to reach a total of $3.18 billion for the year to date. Free cash flow for the quarter totaled $1.07 billion, bringing the nine-month total to $1.24 billion. The company’s dividend yield is 6.47% ($2.00 per share annualized), and Schlumberger appears determined to protect it.

Shares traded up about 1.8% in Friday’s premarket at $32.45. The stock’s 52-week range is $30.65 to $61.19. The 12-month consensus price target was $45.08 before the results were announced. Schlumberger’s shares have dropped by about 45% in the past 12 months.

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