Schlumberger Outshines Expectations: Solid International Growth Fuels Q2 Success

Schlumberger N.V. SLB reported a second-quarter 2024 revenue increase of 13% year-over-year to $9.139 billion, beating the consensus of $9.076 billion.

SLB stated that its core and digital businesses showed strong momentum, leading to the highest quarterly international revenue since 2014.

Revenue by Division: Digital & Integration $1.05 billion (+11% Y/Y); Reservoir Performance $1.819 billion (+11% Y/Y); Well Construction $3.411 billion (+1% Y/Y), and Production Systems $3.025 billion (+31% Y/Y).

International revenue grew 18% Y/Y, with YoY growth of 24% in the Middle East & Asia and 20% in Europe & Africa. North American market revenue declined 6% Y/Y.

“These results demonstrate SLB’s strong position in key, resilient markets, as we continue to benefit from elevated activity in the Middle East & Asia, particularly in gas, and our clients’ increased investments in deepwater basins, exploration, and digital,” commented SLB CEO Olivier Le Peuch.

Adjusted EPS increased 18% Y/Y to $0.85, above the consensus of $0.83.

Adjusted EBITDA was $2.288 billion for the quarter, an increase of 16.6% Y/Y, and margin expanded 81 bps to 25%. The pretax segment operating margin expanded by 76 bps for the quarter to 20.3%.

Operating cash flow for the quarter totaled $1.436 billion, and Free cash flow was $776 million.

Dividend: SLB declared a quarterly cash dividend of $0.275 per share, payable on October 10, 2024, to stockholders of record on September 4, 2024.

During the quarter, SLB repurchased 9.9 million for $465 million. The company said it is on track to return $3.0 billion to shareholders in 2024.

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CEO commented, “Looking ahead to the second half of the year, we expect ongoing momentum in the international markets, strong digital sales, and our cost efficiency programs will enable us to expand margins and deliver our ambition to grow full-year adjusted EBITDA in the mid-teens.”

“Beyond 2024, the fundamentals of this cycle remain in place, and there is a long tailwind of growth opportunities, including long-cycle gas and deepwater projects, production and recovery activity, and the secular trends of digital and decarbonization. This represents a strong backdrop to continue our margin expansion and cash generation journey.”

Price Action: SLB shares are trading higher by 0.74% at $49.08 at the last check Friday.

Photo by Rab Lawrence via Flickr