Schlumberger Reports Earnings As Expected, Revenue Beats Estimates
Schlumberger (SLB), one of the leading companies providing services for oil fields, announced its earnings per share (EPS) for the first quarter as $0.75. This figure is in line with financial analysts’ estimates, as stated in a recent press release. The firm’s revenue was $8.71 billion, exceeding expectations of $8.7 billion and showing 13% growth compared to the same period in the previous year.
Despite earnings meeting forecasts, the value of SLB shares fell 1.2% following the earnings release.
CEO Olivier Le Peuch highlighted the company’s significant growth over the past year, recording an impressive 19% increase in adjusted EPS and a 15% increase in adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation and Depreciation). Le Peuch attributed almost half of the revenue growth to the operations of its Aker subsea division, a component of the OneSubsea partnership. Le Peuch also highlighted the firm’s solid performance in international markets, particularly in the Middle East and Asia and Europe and Africa regions.
Despite a less active market in North America, the company’s international revenues increased by 18% compared to the previous year. The Middle East and Asia sector showed a significant growth of 29%. Schlumberger’s core business segments, Reservoir Performance, Well Construction and Production Systems, have experienced significant expansion. Production Systems’ revenue increased by 28% compared to the previous year with the acquisition of the Aker submarine division.
Looking ahead, Schlumberger is optimistic about its worldwide revenue growth prospects for 2024. The company expects a seasonal increase in operations in the Northern Hemisphere and a continued strong increase in international activities. Schlumberger reiterated its forecast for ten percent growth in EBITDA for this year and announced its intention to distribute $7 billion to shareholders over the next two years. This includes a plan to distribute $3 billion in 2024 and $4 billion in 2025.
Le Peuch spoke positively about the future, citing the solid fundamentals of the oil and gas market and Schlumberger’s strategic positioning to benefit from the growing focus on reducing emissions and adopting technologies with lower carbon footprints. He also mentioned the upcoming acquisition of ChampionX Corporation, which will strengthen Schlumberger’s manufacturing and recovery portfolio.
During the quarter, Schlumberger repurchased 5.4 million shares of its common stock. Although there was a small decline in the share price following the earnings report, the company’s consistent performance and strategic plans point to a positive trend for the coming quarters.