SLB Tops Earnings Estimates on Demand for Offshore and International Drilling

Credit: SLB
Credit: SLB

SLB beat analysts' estimates for quarterly profit on Friday as a rebound in offshore and international drilling activity boosted demand for its oilfield services and equipment, even as activity in North America declined. 

Drilling activity in regions such as the Middle East and Asia, as well as offshore activity in the U.S. Gulf of Mexico, Africa, and Brazil, has increased since Russia's invasion of Ukraine last year. 

However, SLB, the top oilfield service company, joined its rivals Halliburton and Baker Hughes in forecasting tepid North American activity, sending its shares down more than 2% to $55.90 in pre-market trading. 

"We continue to see positive upstream investment momentum in the international and offshore markets," SLB chief Olivier Le Peuch said in a statement, adding that North America activity was moderating. 

International revenue, which makes up more than three-quarters of the company's total, rose 21% to $6.3 billion in the three months to June 30, while revenue from North America climbed 14% to $1.75 billion. 

"To date, the year is playing out largely how the company expected with a more muted outlook for North America and overall profit margins picking up in Q2 through pricing power, technology adoption, and strength in key international markets," said Peter McNally, an analyst at research firm Third Bridge. 

The company, formerly called Schlumberger, reported net income excluding items of 72 cents per share for the three months ended June 30, compared with analysts' average estimate of 71 cents per share, according to Refinitiv data. Revenue of $8.1 billion fell slightly beow analysts' estimate of $8.2 billion. 

(Reuters - Reporting by Arathy Somasekhar in Houston and Arunima Kumar in Bengaluru; Editing by Sriraj Kalluvila and David Holmes)

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