Why SLB Shares Are Sliding Today

Schlumberger N.V. SLB SLB reported a second-quarter FY23 revenue increase of 19.6% year-over-year to $8.10 billion, missing the consensus of $8.22 billion.

Revenue by Division: Digital & Integration $947 million (-1% Y/Y); Reservoir Performance $1.64 billion (+23% Y/Y); Well Construction $3.36 billion (+25% Y/Y), and Production Systems $2.31 billion (+22% Y/Y).

Adjusted EPS increased 44% Y/Y to $0.72, beating the consensus of $0.71.

Adjusted EBITDA was $1.96 billion for the quarter, an increase of 28% Y/Y, and margin expanded 163 bps to 24.2%.

The pretax segment operating margin expanded by 240 bps for the quarter to 19.5%.

Operating cash flow for the six months ended June 30, 2023, totaled $1.94 billion, compared to $539 million a year ago. Free cash flow was $721 million.

Also Read: SLB Bags Contract For Petrobras' Digital Transformation

“Our focus on the quality of our revenue continues to drive margins, and during the second quarter, we received numerous multiyear contract awards. This is bolstering our outlook for long-term growth that will outlast near-term commodity price volatility, and it is reinforcing our belief in the breadth, resilience, and durability of the upcycle,” commented CEO Olivier Le Peuch.

During the quarter, SLB repurchased ~4.5 million shares at an average price of $47.33 per share for a total purchase price of $213 million.

Dividend: SLB's Board of Directors approved a quarterly cash dividend of $0.25 per share, payable on October 12, 2023, to stockholders of record on September 6, 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 upstream investment momentum in the international and offshore markets,” added CEO Olivier Le Peuch. 

Price Action: SLB shares are trading lower by 2.57% at $55.79 premarket on Friday.