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Houston-based oilfield services provider Schlumberger beat analyst estimates for Q1 profits, the company reported on Friday but offered a lowered outlook for its North American growth in 2023.
Higher crude oil prices and tight supplies boosted the demand for SLB’s services and equipment for the first quarter, SLB said, boosting its bottom line.
Schlumberger’s first quarter revenue came in at $7.7 billion. For its international segment, revenue rose 29% compared to the first quarter last year, to $5.97 billion. The company’s North American-derived revenue grew 32% in Q1 compared to the same quarter last year, to $1.7 billion. SLB’s CEO Olivier Le Peuch revealed in a Friday conference call that it expects to post its highest revenue ever in the Middle East.
The highest share of revenue came from well construction, at $3.26 billion, a 36% change year on year.
Net income, excluding items, came in at 63 cents per share for Q1, compared to the 61 cents expected by analysts.
While crude oil prices and demand for OFS bolstered the company’s bottom line in the first quarter, Le Peuch warned that the land market in North America could see activity reach a plateau in 2023 as natural gas prices fall and as private operators continue to show impressive capital restraint.
SLB lowered its outlook for North American growth this year due to weak natural gas markets, which have fallen 50% so far this year.
Schlumberger reported free cash flow of -$265 million for Q1, a figure that SLB says is typical for the season. For Q2, SLB is expecting mid- to high-single-digit revenue growth. Adjusted EBITDA of $1.8 billion increased 43% year on year.
Schlumberger said it was optimistic about support services for offshore and international oil and gas activities.
By Julianne Geiger for Oilprice.com
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Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group.