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SLB Q2 Earnings Beat Estimates, Revenues Rise Year Over Year
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SLB (SLB - Free Report) reported second-quarter 2024 earnings of 85 cents per share (excluding charges and credits), which beat the Zacks Consensus Estimate of 83 cents. The bottom line increased from the year-ago quarter’s level of 72 cents.
The oilfield service giant recorded total quarterly revenues of $9.14 billion, which beat the Zacks Consensus Estimate of $9.07 billion. The top line also improved from the year-ago quarter’s figure of $8.10 billion.
The strong quarterly results were primarily driven by broad-based international revenue growth and margin expansion, with notable contributions from the Middle East & Asia due to capacity expansions and gas development projects. Enhanced offshore exposure, particularly in deepwater basins across Latin America, Europe & Africa and the U.S. Gulf of Mexico, also played a key role.
Revenues in the Digital & Integration unit totaled $1,050 million, up 11% from the year-ago quarter’s level. Pre-tax operating income of $325 million was up 1% year over year. The figure also beat the Zacks Consensus Estimate of $303.56 million.
The unit's revenues grew year over year, primarily due to higher digital revenues. Asset Performance Solutions revenues, however, remained unchanged. The increase in digital revenues was fueled by an increased adoption of Cloud, AI and Edge technology platforms, as well as higher sales of exploration data licenses.
Revenues in the Reservoir Performance unit increased 11% year over year to $1.82 billion. Pre-tax operating income totaled $376 million, up 23% year over year. The figure also beat the Zacks Consensus Estimate of $374.02 million. The upside in profit was led by higher intervention and stimulation activities across all geographic areas, especially in the Middle East and Asia.
The Well Construction segment’s revenues rose 1% from the year-earlier quarter’s level to $3.41 billion. Pre-tax operating income improved 1% to $742 million and the Zacks Consensus Estimate for the same was pegged at $726.99 million. The segment received a boost from ongoing land activity and offshore developments in the Middle East & Asia and Latin America, partially offset by lower drilling in the U.S. land.
Revenues in the Production Systems segment amounted to $3.03 billion, up 31% from the year-ago quarter’s actuals. Pre-tax operating income improved 70% year over year to $473 million, which surpassed the Zacks Consensus Estimate of $435.67 million. The segment benefited from strong international activity in Europe & Africa, Latin America and the Middle East & Asia, supported by a higher-priced backlog.
Cash Flow & Financials
SLB reported a free cash flow of $776 million in the second quarter.
As of Jun 30, 2024, the company had approximately $4.0 billion in cash and short-term investments. It registered a long-term debt of $12.16 billion at the end of the quarter.
Outlook
SLB has reaffirmed its previous guidance of mid-teens EBITDA growth for the full year. The anticipated capital investment for 2024 (including capex, exploration data costs and APS investments) is $2.6 billion, in line with the previous year’s reported numbers.
Sunoco is a leading wholesale motor fuel distributor in the United States, boasting a vast distribution network spanning 40 states. With long-term contracts servicing more than 10,000 convenience stores, it distributes over 10 fuel brands, ensuring a stable revenue stream. SUN currently has a Value Score of A.
The Zacks Consensus Estimate for 2024 and 2025 earnings per unit is pegged at $7.29 and $7.17, respectively. The partnership has witnessed upward earnings estimate revisions for 2024 and 2025 in the past 60 days.
SM Energy is set to expand its oil-centered operations in the coming years, with an increasing focus on crude oil, especially in the Permian Basin and Eagle Ford regions. The company’s attractive oil and gas investments should create long-term value for shareholders.
The Zacks Consensus Estimate for SM’s 2024 EPS is pegged at $7.30. The company has a Zacks Style Score of A for Value. It has witnessed upward earnings estimate revisions for 2024 in the past seven days.
Suncor Energy is Canada's premier integrated energy company. The firm boasts an impressive supply chain network, owning significant oil sands and conventional production platforms, along with a strong downstream portfolio. It is one of the best-positioned companies in the energy space, given its access to abundant resources, rich operating experience and technical know-how.
The Zacks Consensus Estimate for SU’s 2024 EPS is pegged at $3.57. The company has a Zacks Style Score of B for Value. It has witnessed upward earnings estimate revisions for 2025 in the past seven days.
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SLB Q2 Earnings Beat Estimates, Revenues Rise Year Over Year
SLB (SLB - Free Report) reported second-quarter 2024 earnings of 85 cents per share (excluding charges and credits), which beat the Zacks Consensus Estimate of 83 cents. The bottom line increased from the year-ago quarter’s level of 72 cents.
The oilfield service giant recorded total quarterly revenues of $9.14 billion, which beat the Zacks Consensus Estimate of $9.07 billion. The top line also improved from the year-ago quarter’s figure of $8.10 billion.
The strong quarterly results were primarily driven by broad-based international revenue growth and margin expansion, with notable contributions from the Middle East & Asia due to capacity expansions and gas development projects. Enhanced offshore exposure, particularly in deepwater basins across Latin America, Europe & Africa and the U.S. Gulf of Mexico, also played a key role.
SLB Price, Consensus and EPS Surprise
SLB price-consensus-eps-surprise-chart | SLB Quote
Segmental Performance
Revenues in the Digital & Integration unit totaled $1,050 million, up 11% from the year-ago quarter’s level. Pre-tax operating income of $325 million was up 1% year over year. The figure also beat the Zacks Consensus Estimate of $303.56 million.
The unit's revenues grew year over year, primarily due to higher digital revenues. Asset Performance Solutions revenues, however, remained unchanged. The increase in digital revenues was fueled by an increased adoption of Cloud, AI and Edge technology platforms, as well as higher sales of exploration data licenses.
Revenues in the Reservoir Performance unit increased 11% year over year to $1.82 billion. Pre-tax operating income totaled $376 million, up 23% year over year. The figure also beat the Zacks Consensus Estimate of $374.02 million. The upside in profit was led by higher intervention and stimulation activities across all geographic areas, especially in the Middle East and Asia.
The Well Construction segment’s revenues rose 1% from the year-earlier quarter’s level to $3.41 billion. Pre-tax operating income improved 1% to $742 million and the Zacks Consensus Estimate for the same was pegged at $726.99 million. The segment received a boost from ongoing land activity and offshore developments in the Middle East & Asia and Latin America, partially offset by lower drilling in the U.S. land.
Revenues in the Production Systems segment amounted to $3.03 billion, up 31% from the year-ago quarter’s actuals. Pre-tax operating income improved 70% year over year to $473 million, which surpassed the Zacks Consensus Estimate of $435.67 million. The segment benefited from strong international activity in Europe & Africa, Latin America and the Middle East & Asia, supported by a higher-priced backlog.
Cash Flow & Financials
SLB reported a free cash flow of $776 million in the second quarter.
As of Jun 30, 2024, the company had approximately $4.0 billion in cash and short-term investments. It registered a long-term debt of $12.16 billion at the end of the quarter.
Outlook
SLB has reaffirmed its previous guidance of mid-teens EBITDA growth for the full year. The anticipated capital investment for 2024 (including capex, exploration data costs and APS investments) is $2.6 billion, in line with the previous year’s reported numbers.
Zacks Rank & Stocks to Consider
SLB currently carries a Zacks Rank #4 (Sell).
Investors interested in the energy sector may look at some better-ranked stocks like Sunoco LP (SUN - Free Report) , SM Energy Company (SM - Free Report) and Suncor Energy Inc. (SU - Free Report) . While Sunoco and SM Energy currently sport a Zacks Rank #1 (Strong Buy) each, Suncor Energy carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Sunoco is a leading wholesale motor fuel distributor in the United States, boasting a vast distribution network spanning 40 states. With long-term contracts servicing more than 10,000 convenience stores, it distributes over 10 fuel brands, ensuring a stable revenue stream. SUN currently has a Value Score of A.
The Zacks Consensus Estimate for 2024 and 2025 earnings per unit is pegged at $7.29 and $7.17, respectively. The partnership has witnessed upward earnings estimate revisions for 2024 and 2025 in the past 60 days.
SM Energy is set to expand its oil-centered operations in the coming years, with an increasing focus on crude oil, especially in the Permian Basin and Eagle Ford regions. The company’s attractive oil and gas investments should create long-term value for shareholders.
The Zacks Consensus Estimate for SM’s 2024 EPS is pegged at $7.30. The company has a Zacks Style Score of A for Value. It has witnessed upward earnings estimate revisions for 2024 in the past seven days.
Suncor Energy is Canada's premier integrated energy company. The firm boasts an impressive supply chain network, owning significant oil sands and conventional production platforms, along with a strong downstream portfolio. It is one of the best-positioned companies in the energy space, given its access to abundant resources, rich operating experience and technical know-how.
The Zacks Consensus Estimate for SU’s 2024 EPS is pegged at $3.57. The company has a Zacks Style Score of B for Value. It has witnessed upward earnings estimate revisions for 2025 in the past seven days.