Leading oilfield services firm SLB SLB.N announced a 14% rise in first-quarter profit on Friday, aligning with analysts’ projections. The surge was attributed to robust oil and gas drilling demand in the Middle East and Africa, which offset the decline in North American activity.
The company reaffirmed its earlier projection of mid-teens profit growth for the full year and anticipated a seasonal upturn in Northern Hemisphere activity in the second quarter, alongside strong international activity. CEO Olivier Le Peuch emphasized that the growing demand outlook would prompt operators to boost investments in production and reservoir recovery to enhance efficiency and extend the lifespan of their assets.
SLB’s international segment revenue surged by 18% to $7.06 billion, compared to $5.99 billion in the corresponding quarter of the previous year. However, the North American segment experienced a 6% revenue decline to $1.6 billion, falling short of analysts’ expectations.
Although revenue decreased by 3% sequentially in both North America and international markets due to seasonality, SLB revealed plans to return $7 billion to shareholders over the next two years, partly driven by its recent nearly $8 billion acquisition of smaller ChampionX CHX.O.
While SLB’s performance was deemed solid but not exceptional by Third Bridge analyst Peter McNally, uncertainties loomed over the outlook for the company’s largest revenue source, the Middle East, due to OPEC restrictions impacting project development and escalating geopolitical tensions.
For the quarter ended March 31, the Houston-based company reported earnings of $1.07 billion, or 74 cents per share, compared to $934 million, or 65 cents per share, in the previous year. On an adjusted basis, the company earned 75 cents per share, aligning with analysts’ estimates, while its revenue of $8.71 billion marginally surpassed expectations of $8.69 billion.