Oilfield firm SLB’s profit rises on international drilling demand

By Thomson Reuters Apr 19, 2024 | 9:16 AM

HOUSTON (Reuters) -Top oilfield services firm SLB reported a 14% rise in first-quarter profit on Friday, in line with analysts’ estimates, as strong oil and gas drilling demand in the Middle East and Africa helped offset weakness in North American activity.

The company, which also reaffirmed its previous guidance of mid-teens profit growth for the full year, forecast a seasonal rebound in activity in the Northern Hemisphere in the second quarter, along with robust activity internationally.

A growing demand outlook will push operators to increase their investments in production and reservoir recovery to boost efficiency and life of their producing assets, CEO Olivier Le Peuch said.

Revenue from SLB’s international segment rose by 18% to $7.06 billion, compared with $5.99 billion in the year-ago quarter.

The North American segment’s revenue declined 6% to $1.6 billion, falling short of analysts’ estimates of $1.65 billion, according to LSEG data.

Sequentially, revenue declined 3% both in North America and in international markets due to seasonality.

Shares of SLB, formerly known as Schlumberger, were down 1.6% at $50.15 in premarket trading.

SLB said it would look to return $7 billion to shareholders over the next two years, in part due to its nearly $8 billion acquisition of smaller ChampionX.

Returns to shareholders will be about $3 billion in 2024 and $4 billion in 2025, the company said, helped in part by its ChampionX deal.

“It was solid but an unspectacular quarter from Schlumberger,” said Third Bridge analyst Peter McNally.

The outlook for the Middle East, the company’s largest source of revenue, was uncertain due to restraints by the Organization of the Petroleum Exporting Countries that will impact some project development and rising geopolitical tensions, McNally added.

The Houston, Texas-based company reported earnings of $1.07 billion, or 74 cents per share, for the quarter ended March 31, compared with $934 million, or 65 cents per share, last year.

On an adjusted basis, the company earned 75 cents per share, in line with analysts estimates. Revenue of $8.71 billion marginally beat expectations of $8.69 billion.

(Reporting by Sourasis Bose and Arunima Kumar in Bengaluru, Arathy Somasekhar in Houston; Editing by Devika Syamnath and Chizu Nomiyama)