Shares of Schlumberger Ltd. (NYSE: SLB) are plunging in early morning trading after the company posted a 22% increase in fourth-quarter profit, but missed analysts' expectations because of weakness in the U.S. market.

Schlumberger reported that its quarterly profit climbed to $1.38 billion, helped by increased demand in the Eastern Hemisphere and Latin America. The oilfield services company's earnings per share numbers came in at $1.12 per share. Excluding special items, Schlumberger showed earnings of $1.11, missing estimates by two pennies.

The company's results did show a respectable jump in revenue of 17% to $6.25 billion, up from $5.35 billion a year earlier. The rise in revenue came from Latin America where sales rose 40% and from the Middle East and Asia where sales saw an increase of 30%. On the other hand, North American sales dipped by 7% in North America. Analysts had been expecting to see Schlumberger show a revenue of $6.14 billion.

Schlumberger blames lower pricing in U.S. land operations and seasonal weather factors for its lower fourth quarter margins. Pressure on the onshore U.S. market came also from lower marine utilization as several of the company's vessels were placed in dry dock. The company had to pay higher that expected start-up costs in South America, which also cut into margins.

Looking ahead, Schlumberger said the shorter-term growth outlook presents "a more complex picture than the immediate past." The company shows optimism over its land activity outside North America which is expected to remain strong.

Higher oil prices that reached $100 a barrel lifted the company demand over the past few quarters. Thus Schlumberger saw its stock price climbing more than 50% over the past year. In all, the oilfield services company posted a profit of $5.18 billion for the full year 2007, on revenue of $23.3 billion.

The oil sector has been under pressure recently on increased concerns over an economic slowdown. However, I expect to see further gains for the company as crude oil prices show no significant signs of easing too much more.

Eliza Popescu is a financial writer for the online investment advisory service Investor's Observer.