SLB Stock Rises on Strong International Growth

SLB Stock

Schlumberger Limited (SLB), the world’s largest oilfield services company, reported its second-quarter results on July 21, beating analysts’ expectations on both revenue and earnings. The company’s stock rose 2.08% on Monday, closing at $58.34, as investors reacted positively to the strong performance.

SLB Stock

SLB Benefits from Global Recovery

SLB’s revenue for the second quarter was $8.1 billion, up 20% year-over-year and 8% sequentially. The company attributed the growth to the recovery of the global oil and gas industry, especially in international markets where SLB has a dominant presence.

The company’s international revenue increased by 23% year-over-year and 11% sequentially, driven by higher activity and pricing across all regions. SLB’s international revenue accounted for 80% of its total revenue in the second quarter, highlighting its competitive advantage over its peers.

SLB’s net income for the second quarter was $1.03 billion, or $0.72 per share, compared to a net loss of $3.43 billion, or $2.47 per share, in the same period last year. The company’s earnings per share (EPS) beat the consensus estimate of $0.26 by a wide margin.

SLB Focuses on Digital Transformation and Sustainability

SLB’s CEO Olivier Le Peuch said that the company’s strong results reflected its “successful execution of our returns-focused strategy” and its “differentiated performance in the international markets”. He also said that SLB was “accelerating our digital transformation” and “advancing our sustainability agenda”.

SLB has been investing heavily in digital solutions to enhance its operational efficiency and customer satisfaction. The company launched several new digital products and platforms in the second quarter, such as DELFI Cognitive E&P Environment, Schlumberger Enterprise Data Management Solution, and Performance Live digitally connected service.

SLB has also been pursuing sustainability initiatives to reduce its environmental impact and support the energy transition. The company issued its first sustainability-linked bond (SLB) in June, raising $1.6 billion to fund projects that align with its environmental, social, and governance (ESG) goals. The company also announced several partnerships and collaborations to develop low-carbon technologies, such as carbon capture and storage (CCS), hydrogen production, and geothermal energy.

SLB Faces Challenges in North America

Despite its impressive performance in the international markets, SLB faced some headwinds in North America, where its revenue declined by 2% sequentially due to lower drilling activity and pricing pressure. The company’s North America revenue accounted for only 20% of its total revenue in the second quarter, down from 23% in the previous quarter.

SLB’s CEO said that the company was “optimizing our business portfolio” and “managing our resources” in North America to improve its profitability and returns. He also said that SLB was “positioned for growth” in North America as the demand for oil and gas increased and the market conditions improved.

SLB Outlook Remains Positive

SLB expects its revenue to grow by double digits in the second half of 2023, driven by the continued recovery of the global oil and gas industry and its strong international presence. The company also expects its margins to expand as it benefits from higher activity, pricing, and efficiency.

SLB’s CEO said that the company was “confident in our ability to deliver strong free cash flow” and “committed to returning cash to our shareholders” through dividends and share buybacks. He also said that SLB was “well positioned to capitalize on the long-term growth opportunities” in the oil and gas sector and beyond.

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