(Oil Price) – The world’s biggest oilfield services provider, SLB (NYSE: SLB), expects to exceed its commitment of returns to shareholders this year as its third-quarter profit beat estimates and cash flow generation remained strong despite softened short-cycle activity.
SLB reported on Friday earnings per share (EPS), excluding charges and credits, of $0.89 for the third quarter, up by 5% sequentially and 14% year on year. The earnings beat the analyst consensus estimate of EPS of $0.88 compiled by The Wall Street Journal.
Revenues of $9.16 billion was steady quarter-on-quarter and rose by 10% year-over-year, and was slightly below estimates.
SLB’s revenue in the Middle East and Asia rose, but declined in Latin America.
North American revenue increased by 3% in the third quarter compared to both the second quarter and the third quarter of 2024, thanks to higher demand for services in the U.S. Gulf of Mexico and higher drilling activity in Canada, which more than offset lower drilling revenue in U.S. shale.
“This performance was achieved despite an environment where short-cycle activity growth softened, and some international producers exercised cautious spending triggered by lower oil prices and ample global supply, while land activity in the U.S. remained subdued,” SLB chief executive officer Olivier Le Peuch said in a statement.
During the third quarter, SLB returned nearly $900 million to shareholders through stock repurchases and dividends, bringing total return to shareholders for the first nine months of the year to $2.38 billion.
“We now expect to exceed the $3.0 billion return to shareholders commitment we made earlier this year,” Le Peuch noted.
Despite the recent softness in upstream spending globally, due to the macroeconomic situation, SLB expects investments to remain at a sustained high level for years.
“Although the rate of upstream spending growth has moderated in the last few months due to the macroenvironment, we continue to expect a sustained level of upstream investment in the years to come,” SLB’s Le Peuch said.
By Tsvetana Paraskova for Oilprice.com
