SLB’s Profit Exceeds Forecasts Due to Steady Demand for Oilfield Services
SLB’s performance improvement occurred due to stable demand for its services in certain international regions, which helped offset the slowdown in drilling operations in North America, Mexico, and Saudi Arabia.
The company, the first among the major American oilfield service providers to release its report, had previously noted reduced activity in Saudi Arabia and Latin America, where drilling rigs were shut down and short-term projects slowed. SLB’s management explained that the current oil market is influenced by several factors, including the global oil supply, OPEC+ production decisions, trade negotiations, and geopolitical conflicts.
The average oil price in the reporting quarter was around $67 per barrel, significantly lower than a year ago. This decline raised investor concerns that oil companies might cut back on exploration and production spending, which would reduce demand for services from companies like SLB.
SLB CEO Olivier Le Peuch added that the company’s clients are now acting selectively, prioritizing key projects and planning offshore deepwater operations with particular caution.
Although SLB’s international revenue dropped by more than 8% to $6.85 billion year-over-year, this figure still exceeded analysts’ forecasts. Increased offshore activity and growing demand for drilling in the United Arab Emirates, Kuwait, and Iraq contributed to the company’s results. SLB’s total revenue also declined by 6%, to $8.55 billion, but again, the outcome surpassed market expectations. Meanwhile, the company’s North American revenue grew by 1% due to demand for data center solutions.
SLB’s net income (excluding certain one-time items) was $0.74 per share, which was one cent above analysts’ expectations.
