Wall Street guessed that writedowns from Schlumberger Ltd. were coming, but some analysts were taken aback by the sheer size of the US$12.7 billion in pretax charges reported by the oil services company on Friday.

The company’s earnings report was its first since Chief Executive Officer Olivier Le Peuch took the reins in August. The writedowns led the company to post its largest net quarterly loss in at least a decade. Schlumberger said on its earnings conference call that the writedowns were part of the new CEO’s strategy.

The size of the charges was “eyebrow-raising,” analysts at Tudor, Pickering, Holt & Co. said in a note after the report was released. “Better to rip Band-Aid off sooner vs. later.”

Most of the charges -- US$8.8 billion -- comprised writedowns on goodwill, the intangible asset on a corporate balance sheet that typically arises after the acquisition of another company. Schlumberger cited its 2010 purchase of Smith International Inc. and its takeover of Cameron International Corp. in 2016, and the subsequent deterioration in market conditions.

Schlumberger also reported a US$1.58 billion charge related to its pressure-pumping business in North America, where the fracking industry is slowing. Citing “ongoing economic challenges in Argentina,” it recorded US$127 million of charges due to its activities in the country. It also had US$62 million of severance costs in the quarter.