Oil Field Services Giant SLB Reports International and Offshore Growth

The world’s largest oil fields service company SLB (formerly known as Schlumberger) reported better than expected second quarter earnings on lower-than-expected revenue Friday before the market opened. $SLB stock was down 1% after the release with concerns about and activity in the North American onshore market may plateau this year. Earnings per share rose to $0.72 per-share from $0.50 a year earlier, just above the consensus of $0.71. Revenue jumped 20% to nearly $8.1 billion but fell short of the consensus view for $8.21 billion.

The oil service giant’s peers Baker Hughes (BKR) and Halliburton (HAL) reported earlier in the week.

Schlumberger Vintage

Schlumberger Ltd NYSE: SLB Reported Before Open Friday

Schlumberger Q2 23 Earnings

Q2 2023 earnings release at 6:15 a.m. ET; conference call at 8:30 a.m ET

  • Q2 Non-GAAP EPS of $0.72 beats by $0.01.
  • Revenue of $8.1B (+19.6% Y/Y) misses by $110M.
  • Adjusted EBITDA of $1.96 billion increased 10% sequentially and 28% year on year
  • Well construction revenue +25% to $3.36 billion, helped by robust measurements, fluids and equipment sales activity, as well as international price increases.
  • Production systems +22% to $2.31 billion on “strong activity across all areas”
  • Reservoir performance division +23% to $1.64 billion led by the Middle East and Asia, due to increased intervention and stimulation activity.
  • Digital and integration sales down 1% to $947 million, impacted by lower asset performance solutions revenue and decreased exploration data license sales.
  • International revenue grew 21% to about $6.3 billion
  • North America inclined 14% to $1.75 billion.
  • Cash flow $1.61 billion. SLB said it expects free cash flow in the second half to be stronger than the first half, setting it up for stronger annual FCF than the prior year.

SLB: Stock Market Reaction

  • $55.79 -1.47 (-2.57%) Pre-Market
  • $57.26 +23.63 (70.26%) past year
  • $57.26 -8.48(12.90%) past 5 years
  • 52wk High $62.15
  • 52wk Low $32.98

Outlook

“We continue to see positive upstream investment momentum in the international and offshore markets,” CEO Olivier Le Peuch said in a statement. “As international spending builds further momentum in the second half of 2023 and North America moderates as anticipated, this cycle continues to align closely with SLB’s strengths, affirming our confidence in our full-year financial ambitions.”

“Our focus on the quality of our revenue continues to drive margins, and during the second quarter, we received numerous multiyear contract awards,” Chief Executive Olivier Le Peuch said in a statement. “This is bolstering our outlook for long-term growth that will outlast near-term commodity price volatility.”

Oil Prices

SLB Peer’s Earnings

About Schlumberger

SLB (formerly Schlumberger) NV is the world’s largest oil fields service company and provides technology for reservoir characterization, drilling, production and processing to the oil and gas industry. It operates through the following business segments: Digital and Integration, Reservoir Performance, Well Construction, and Production Systems. “With expertise in more than 120 countries, we collaborate to create technology that unlocks access to energy for the benefit of all.”

“Overall, 2022 was transformative for SLB as we set new safety, operational, and performance benchmarks for our customers and strengthened our market position both internationally and in North America. We launched our bold new brand identity, reinforcing our leadership position in energy technology, digital, and sustainability, and demonstrated our ability to deliver superior earnings in this early phase of a structural upcycle in energy.” SLB CEO Olivier Le Peuch commented,

Source: SLB

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