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SLB’s second-quarter revenue beat analysts’ expectations.
George Osodi/Bloomberg
Shares of
SLB
fell on Friday after second-quarter revenue at the oil services company formerly known as Schlumberger fell short of expectations. International growth optimism could not offset a more mixed outlook for North American drilling.
SLB
(Ticker: SLB) The stock fell 2.6% in premarket trading, after rising 15% in the past three months to Thursday’s close.
SLB said its adjusted profit was 72 cents per share for the second quarter, up 44% from the same period a year earlier. Revenue was $8.1 billion, up 20% from the prior year.
SLB was expected to report earnings of 71 cents a share on revenue of $8.2 billion, according to a FactSet poll of analyst estimates.
“We continue to see positive upstream investment momentum in international and offshore markets,” CEO Olivier Le Peuch said in a statement. “As international spending builds momentum in the second half of 2023 and North America moderates as expected, this cycle continues to align closely with SLB’s strengths, affirming our confidence in our financial ambitions for the full year.”
The SLB report highlighted a trend seen in earnings other companies including
hugue baker
(BKR) and
Halliburton
(HAL), which showed an upturn in activity overseas but a drop in oil drilling activity in the United States.
Analysts expect a surge offshore oil drilling while a number of companies have emerged from bankruptcy and are enjoying higher rental rates for their rigs.
“Looking a little deeper at revenue, international markets now overtake North America for SLB. International revenue is now approaching 80% of total SLB and Q2 growth of 21% year-on-year shows a widening gap to
Halliburton
,
their main competitor,” Third Bridge analyst Peter McNally wrote in a research note.
Cash flow for the quarter was $1.61 billion. SLB said it expects free cash flow in the second half to be higher than in the first half, setting it up for stronger annual FCF than the prior year.
Write to Adam Clark at adam.clark@barrons.com
