Schlumberger Drills Past Q4 Expectations, Plans $2.6B Investment In 2024

Schlumberger N.V. SLB reported a fourth-quarter fiscal 2023 revenue increase of 14% year-over-year to $8.99 billion, beating the consensus of $8.95 billion.

Revenue by Division: Digital & Integration $1.05 billion (+4% Y/Y); Reservoir Performance $1.735 billion (+12% Y/Y); Well Construction $3.43 billion (+6% Y/Y), and Production Systems $2.94 billion (+33% Y/Y).

Adjusted EPS increased 21% Y/Y to $0.86, beating the consensus of $0.84.

Related: Schlumberger Set To Unveil Q4 Earnings: Drilling Down Into Market Expectations, Business Potential

Adjusted EBITDA was $2.28 billion for the quarter, an increase of 19% Y/Y, and margin expanded 95 bps to 25.3%. The pretax segment operating margin expanded by 101 bps for the quarter to 20.8%.

Operating cash flow for the quarter totaled $3.02 billion; for fiscal 2023, it was $6.64 billion compared to $3.72 billion. Free cash flow was $4.04 billion for the fiscal.

“Compared to the same quarter last year, international revenue outpaced North America, growing 18% while North America was relatively flat,” commented CEO Olivier Le Peuch.

“Notably, we achieved our highest-ever revenue in the Middle East, led by impressive growth in Saudi Arabia, the United Arab Emirates, and Egypt & East Mediterranean GeoUnits.”

“In 2024, we will experience another year of strong growth driven by the international markets. Benefiting from these market dynamics, we foresee further growth led by Production Systems, strengthened by the additional subsea opportunities from our OneSubsea joint venture,” added Peuch.

The management reports that 70% of the sequential revenue growth is attributed to the Aker subsea acquisition, complemented by the sustained international expansion of the existing legacy portfolio.

During the quarter, SLB repurchased 1.8 million shares at an average price of $54.46 per share for a total purchase price of $100 million.

Dividend: SLB’s Board of Directors approved a 10% increase to quarterly cash dividend from $0.250 per share of outstanding common stock to $0.275 per share, beginning with the dividend payable on April 4, 2024, to stockholders of record on February 7, 2024. 

The company’s capital investment in 2024 is expected to be ~$2.6 billion, similar to the full year 2023.

Additionally, the company plans to increase share repurchases in 2024, visibly enhancing returns to shareholders for the full year.

Price Action: SLB shares are trading higher by 1.52% at $49.30 on the last check Friday.

Photo by Rab Lawrence via Flickr