SLB tops quarterly profit estimate, plans $4 billion shareholder returns
SLB beat Wall Street expectations for the fourth-quarter profits on Friday as the world's largest?oilfield service provider benefited from ChampionX acquisition and announced?plans? to return $4 billion in profit to shareholders this year.
The company acquired ChampionX for $7.75 billion in all-stocks last July. This acquisition added production chemicals and artificial lifting technologies to the company's portfolio.
Oilfield service providers are following energy producers to negotiate deals that will help them navigate the operational and pricing pressures as customers reduce spending on new wells to prioritize investor returns.
The acquisition contributed $879 millions to the?total revenues and $206 in adjusted core profits in the fourth quarter. It also helped the?quarterly revenue in North America increase by 26% despite the softness of the region.
SLB increased its quarterly dividend by 3.5%. It said that it expected to return more than $4 billion in shareholder returns through dividends and share repurchases, by 2026.
According to data compiled and analyzed by LSEG, the company reported a profit adjusted of 78 cents for the three-month period ended December 31. This compares with an average analyst estimate of 74.
INVESTORS EYE VENEZUELA BOST
SLB shares are up?23% in value since the capture by the U.S. of Venezuelan president Nicolas Maduro, on January 3. Investors bet that SLB will 'be a major winner when the country's dilapidated and ailing oil sector is rebuilt.
In premarket trading, the company's shares rose marginally on Friday.
Stifel analyst Stephen Gengaro said that Halliburton and SLB are two of the most well-positioned companies to benefit from investments in Venezuela.
Halliburton's CEO Jeff Miller said on a conference call following its earnings that the company was able to scale up in Venezuela fairly quickly and that they were working with the U.S. to obtain licenses that would allow them to operate there.
(source: Reuters)
