Schlumberger's Strategic Expansion Pays Off: Surpasses Q1 Topline Expectations, Commits To $7B Shareholder Return

Schlumberger N.V. SLB reported a first-quarter 2024 revenue increase of 13% year-over-year to $8.707 billion, beating the consensus of $8.689 billion.

The company stated that almost half of the year-on-year revenue increase came from the Aker subsea business, which was added as part of our OneSubsea joint venture in the fourth quarter of 2023.

Related: Schlumberger Expands Carbon Capture Reach Through Aker ACC Deal: Details

Revenue by Division: Digital & Integration $953 million (+7% Y/Y); Reservoir Performance $1.725 billion (+15% Y/Y); Well Construction $3.368 billion (+3% Y/Y), and Production Systems $2.82 billion (+28% Y/Y).

International revenue grew 18% Y/Y, with YoY growth of 29% in the Middle East & Asia and 18% in Europe & Africa. North American market revenue declined 6% Y/Y.

Adjusted EPS increased 19% Y/Y to $0.75, which aligned with the consensus.

Related: Schlumberger Likely To Report Higher Q1 Earnings; Here Are The Recent Forecast Changes From Wall Street’s Most Accurate Analysts

Adjusted EBITDA was $2.06 billion for the quarter, an increase of 15% Y/Y, and margin expanded 51 bps to 23.6%. The pretax segment operating margin expanded by 95 bps for the quarter to 18.9%.

Operating cash flow for the quarter totaled $327 million compared to $330 million a year ago. Free cash flow was negative $(222 million.

Dividend: SLB declared a quarterly cash dividend of $0.275 per share, payable on July 11, 2024, to stockholders of record on June 5, 2024.

“We remain confident in our global revenue growth outlook for 2024, with softness in North America being offset by upside in the international markets,” CEO Olivier Le Peuch commented.

“Based on our strong start to the year, confidence in our ability to generate robust cash flows, and the anticipated contribution of the announced ChampionX acquisition, we are targeting to return $7 billion to shareholders over the next two years. This represents a target for returns to shareholders of $3 billion in 2024 and $4 billion in 2025.”

Related: ChampionX, Schlumberger Shares Move In Opposite Directions After $8B Deal Announcement

During the quarter, SLB repurchased 5.4 million shares at an average price of $50.13 per share for $270 million.

Price Action: SLB shares are trading lower by 1.87% at $49.99 at the last check Friday.

Photo by Rab Lawrence via Flickr