Oilfield-services company Schlumberger ( SLB) reported a 22% increase in its fourth-quarter earnings, but it cautioned that Wall Street's expectations for this year could be on the high side. The company earned $1.38 billion, or $1.12 a share, in the latest quarter, up from $1.13 billion, or 92 cents a share, in the same period of 2006. Analysts at Thomson Financial were expecting Schlumberger to earn $1.13 a share in the quarter. Revenue reached $6.25 billion, compared with $5.35 billion a year ago. It generated $5.44 billion in oilfield-service revenue, up 18% sequentially and 6% from the year-ago quarter. "Schlumberger revenues in 2007 grew by 21%, driven by strong demand for oilfield services particularly in the Eastern Hemisphere and Latin America," CEO Andrew Gould said in a prepared statement. "All technologies showed double-digit improvement, with drilling and measurements, well testing and integrated project management recording the highest overall growth rates." The earnings shortfall was largely caused by a drop in well-stimulation and other services in the U.S. market. Revenue generated in North America during the quarter fell 7% year over year to $1.33 billion. On a conference call, Gould warned that "the market's expectations for demand growth in 2008 are a little bullish." However, he said that's because analysts are a bit too optimistic, not as a result of signs that the business environment is getting worse. Shares of Schlumberger were recently trading nearly 10% lower at $74.53. The company has only partially recovered from a slowdown in the Gulf of Mexico caused by inclement weather in the third quarter of 2007. The expensing of significant start-up costs for some major projects in Mexico were also a factor in the fourth quarter. Gould said that the handful of rough spots that hindered Schlumberger's performance last quarter were mostly seasonal and likely won't reappear in the first quarter. Latin American revenue of $943 million was 40% higher than a year earlier, and revenue of $1.77 billion from Europe, Russia and Africa increased 23% year on year. Middle Eastern revenue of $1.35 billion climbed 30% from a year ago. Higher demand for seismic services prompted Schlumberger to purchase Dubai-based Eastern Echo Holding, which has six modern 3-D seismic vessels on order. The transaction will bolster its ability to explore for new oil discoveries. Also, as part of a 40-million-share buyback program, Schlumberger spent $557 million for 5.8 million shares in the fourth quarter, bringing the total level of shares repurchased to 29.9 million. Along with its results, Schlumberger said its board raised the quarterly dividend by 20% to 21 cents a share.