SLB Beats Profit Forecast As Offshore And International Drilling Rebounds

The biggest oilfield services firm in the world, SLB (NYSE: SLB), reported on Friday higher-than-expected earnings for the second quarter thanks to higher offshore drilling activity and a rebound in the international markets.

SLB’s earnings per share for the second quarter rose by 11% sequentially and by 7% year on year, to $0.72, beating the analyst consensus of $.0.71 EPS.

The revenue of $8.10 billion rose by 5% on the first quarter and jumped by 20% year on year, led by significant growth in the international markets, especially the Middle East, Asia, and offshore. International markets account for around 80% of all revenues at SLB, formerly known as Schlumberger.

North American revenue at SLB also rose in the second quarter compared to the same period last year, with the growth pace lower than in other markets as activity is moderating, the company said.

Earlier this week, Halliburton and Baker Hughes reported consensus-beating profits for the second quarter, but both signaled softer demand for drilling on the North American market.

For SLB, “Compared to the same period a year ago, international revenue grew 21%, outpacing North America which increased 14%,” chief executive Olivier Le Peuch commented.

SLB continues to be confident in the positive long-term outlook of the energy services industry.  

“We continue to see positive upstream investment momentum in the international and offshore markets,” Le Peuch said.

“These markets are being driven by resilient long-cycle offshore developments, production capacity expansions, the return of global exploration and appraisal, and the recognition of gas as a critical fuel source for energy security and the energy transition.”

The executive noted, “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.”

By Tsvetana Paraskova for Oilprice.com

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