SLB Reports Strong Fourth-Quarter Earnings, Driven by International Growth

Oil services company SLB, formerly known as Schlumberger Ltd, experienced a significant stock increase of 3% following its fourth-quarter earnings report, exceeding analyst expectations. The key driver of this success was the company’s robust international business, particularly in regions such as the Middle East, Asia, Europe, and Africa.

Digital and Integration Revenue Up 10%

Chief Executive Olivier Le Peuch highlighted that SLB’s digital and integration revenue surged by **10%** year-over-year, with a remarkable **20%** growth in digital revenue, totaling **$2.44 billion** for the year. This impressive performance can be attributed to the advent of artificial intelligence and autonomous operations within the oil sector, a trend that Le Peuch is optimistic will continue to foster growth. In his prepared remarks, he stated, “**AI is the X factor for our industry, and I am confident that SLB will continue to be a leader in this area, enabling us to deliver sustained outperformance for our customers, partners, and shareholders**.”

Earnings and Revenue Performance

In the fourth quarter, SLB reported per-share earnings of **77 cents**, matching the same figure from the previous year. After adjusting for one-time items, the earnings per share increased to **92 cents**, surpassing the **90-cent** consensus estimate by FactSet. The company’s revenue for the quarter rose to **$9.284 billion**, compared to **$9.158 billion** a year earlier, also exceeding the FactSet consensus of **$9.184 billion**.

The growth in SLB’s revenue can be linked to its international operations, with international revenue climbing **12%**, thanks in part to the integration of the acquired Aker subsea business. Le Peuch pointed out that “**On a divisional basis, Digital & Integration led revenue performance, driven by increased demand for digital products and solutions, while Production Systems benefited from strong backlog conversion as customers continued to invest in maximizing recovery from existing assets**.”

Oil Supply Imbalance Expected to Abate

Le Peuch expressed confidence that the oversupply of oil would start to diminish by **2025**. He noted that **upstream investment growth** would likely remain limited in the short term due to the global oversupply situation but projected that this imbalance would improve gradually. He remarked, “**Global economic growth and a heightened focus on energy security, coupled with rising energy demand from AI and data centers, will support the investment outlook for the oil-and-gas industry throughout the rest of the decade**.”

Shareholder Returns and Future Outlook

In a display of commitment to shareholders, SLB announced a **3.6%** increase in its quarterly dividend to **27 cents** per share, with the new dividend set to be paid on **April 3** to shareholders on record as of **February 5**. Furthermore, the company raised its share buyback authorization to a minimum of **$4 billion** for the year, reinforcing its dedication to enhancing shareholder value.

Despite the positive developments, it is worth mentioning that SLB’s stock has experienced a **14% decline** over the past year, contrasting with the **25% increase** of the S&P 500. This disparity could indicate potential opportunities for investors looking to capitalize on SLB’s promising growth trajectory amidst a challenging market environment.

Conclusion

SLB’s fourth-quarter earnings results are a testament to the company’s resilience and ability to adapt to evolving market dynamics. Their focus on digital transformation and international markets places them in a strong position to capitalize on future growth opportunities. With increased shareholder returns and a forward-looking investment strategy, SLB illustrates how oil services companies can thrive, even in the face of global challenges.

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SLB Reports Strong Q4 Earnings Boosted by International Growth and Digital Advancements