SLB Q1 Results Beat Analyst Expectations, Records 30% Revenue Growth

Oilfield services giant SLB SLB, formerly Schlumberger, reported a first-quarter FY23 revenue increase of 30% year-over-year to $7.74 billion, beating the consensus of $7.44 billion.
Revenue by Division: Digital & Integration $894 million (+4% Y/Y); Reservoir Performance $1.5 billion (+24% Y/Y); Well Construction $3.26 billion (+36% Y/Y), and Production Systems $2.21 billion (+38% Y/Y).
Net income attributable for the quarter jumped 83% Y/Y and declined 12% sequentially to $934 million.
Adjusted EPS increased 85% Y/Y to $0.63, beating the consensus of $0.60.
Also Read: SLB Likely To Report Higher Q1 Earnings, Here's A Look At Recent Price Target Changes By The Most Accurate Analysts
Adjusted EBITDA was $1.79 billion for the quarter, an increase of 43% Y/Y. Adjusted EBITDA margin expanded 208 bps to 23.1% from 21% in 1Q22.
The pretax segment operating margin expanded by 298 bps for the quarter to 18%.
The firm stated that the quarter was defined by strong activity dynamics offshore and in the broader international basins, most notably in Well Construction and Production Systems.
Cash flow from operations for the quarter was $330 million, compared to $131 million in 1Q22. Free cash outflow was $(265) million.
Dividend: SLB's Board of Directors approved a quarterly cash dividend of $0.25 per share, payable on July 13, 2023, to stockholders of record on June 7, 2023.
The company reiterated its capital investment forecast for FY23 to be ~$2.5-$2.6 billion versus $2.3 billion in 2022.
"We continue to see positive pricing as our performance differentiates, technology adoption increases, contract terms are adjusted to offset inflation, and service capacity continues to tighten in key international markets," commented CEO Olivier Le Peuch.
"Looking ahead to the second quarter, we expect strong growth with seasonal recovery in the Northern Hemisphere, capacity expansion projects in the Middle East that are in various stages of ramp-up, and robust activity in Asia and Sub-Sahara Africa. This growth scenario provides support for broad sequential margin expansion across the Divisions and geographies," stated CEO Olivier Le Peuch.
Price Action: SLB shares are trading lower by 0.19% at $51.87 premarket on Friday.

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