SLB beats quarterly profit estimates on steady oilfield services demand
SLB, a leading oilfield services company, narrowly beat Wall Street's expectations for the second quarter profit on Friday as resilient demand from parts of its global business offset the drilling slowdowns in North America and Mexico.
SLB was the first among the Big Three U.S. oilfield service providers to announce quarterly results. It had already reported a weakening drilling activity in Saudi Arabia, Latin America and the Middle East, with demobilized rigs and a slowdown of short-cycle projects.
In a recent statement, CEO Olivier Le Peuch stated that the market was navigating multiple dynamics, including fully-supplied oil markets, OPEC+ releases of supply, ongoing trade discussions and geopolitical conflict.
The average crude oil price was $66.83 a barrel during the quarter of April-June, down by more than 21% compared to a year ago.
This decline has led to concerns that there will be a wider pullback in spending on exploration and production, which could impact the demand for oilfield service.
Le Peuch said that customers have adapted their activity selectively. They prioritized key projects, and planned cautiously in particular for offshore deepwater markets.
In premarket trading, shares of the company rose 1.3%.
SLB reported that international revenue fell by more than 8% to $6.85 Billion in the third quarter, down from $7.45 Billion a year earlier.
LSEG data shows that this still exceeded analysts' expectations of $6.77bn.
The company's performance was boosted by increased offshore drilling in Kuwait, the UAE and Iraq.
Total revenue dropped 6%, to $8.55 Billion. This was higher than the $8.48 Billion expected.
SLB reported that its North America second-quarter revenue increased 1%, to $1.66 Billion from the previous year. This was largely due to gains in data center infrastructure solutions.
For the three-month period ended June 30, the company reported earnings per share of 74 cents, excluding any charges or credits. This was compared to an expectation of 73cents.
(source: Reuters)
