Top oilfield services provider SLB missed estimates for first-quarter profit on Friday, as weaker Latin American demand dragged on its international business, and the company warned of a potential industry-wide shift due to economic uncertainty, volatile oil prices and rising tariff risks.
Shares of the company fell nearly 2% in premarket trading following results.
SLB's report rounds out the first-quarter earnings from U.S. oilfield service providers, with rivals Halliburton and Baker Hughes earlier this week flagging concerns about weakening market conditions and tariff uncertainties.
Halliburton warned of a second-quarter earnings hit due to tariffs and reduced North American oilfield activity, while Baker Hughes projected deeper spending cuts by global producers amid fading demand expectations and falling crude prices.
U.S. benchmark WTI crude CLc1 is currently trading around $62 per barrel — below the break-even point for many oil and gas producers.
Any pullback in capital expenditures poses a direct challenge for oilfield service companies as they rely heavily on sustained investment in exploration and production.
The first quarter was "subdued," SLB CEO Olivier Le Peuch said in a statement, citing a sharper-than-expected slowdown in Mexico, a slow start to the year in Saudi Arabia and offshore Africa, and steep decline in Russia.
Latin America revenue fell 10% to $1.50 billion, with total international revenue declining 5% to $6.73 billion.
In contrast, North America posted an 8% year-on-year revenue increase, partly supported by strong growth in data centre infrastructure and higher intervention activity, though gains were partly offset by weaker U.S. land drilling.
The company, formerly known as Schlumberger, said earnings, excluding charges and credits, were 72 cents per share for the three months ended March 31, missing analysts' average estimate of 74 cents, according to data compiled by LSEG.
(Reuters - Reporting by Arunima Kumar in Bengaluru; Editing by Sriraj Kalluvila)
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