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SLB Q3 Earnings Beat Estimates, Revenues Rise Year Over Year
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SLB (SLB - Free Report) reported third-quarter 2024 earnings of 89 cents per share (excluding charges and credits), which beat the Zacks Consensus Estimate of 88 cents. The bottom line also increased from the year-ago quarter’s level of 78 cents.
The oilfield service giant recorded total quarterly revenues of $9.16 billion, which missed the Zacks Consensus Estimate of $9.28 billion. The top line improved from the year-ago quarter’s figure of $8.31 billion.
The strong quarterly earnings were primarily driven by broad-based earnings growth and margin expansion, especially in the Middle East, Asia and offshore North America. Additionally, cost optimization, greater adoption of digital solutions, and contributions from long-cycle deepwater and gas projects played significant roles.
Revenues in the Digital & Integration unit totaled $1,088 million, up 11% from the year-ago quarter’s level. Pre-tax operating income of $386 million was up 23% year over year. The figure also beat the Zacks Consensus Estimate of $341 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.
Revenues in the Reservoir Performance unit increased 9% year over year to $1.82 billion. Pre-tax operating income totaled $367 million, up 7% year over year. The figure missed the Zacks Consensus Estimate of $393 million. The upside in profit can be attributed to higher intervention offset by lower evaluation and flat stimulation revenues. Offshore North America and Latin America saw growth, while Europe, Africa and the Middle East & Asia experienced declines.
The Well Construction segment’s revenues fell 3% from the year-earlier quarter’s level to $3.31 billion. Pre-tax operating income decreased 6% to $714 million and the Zacks Consensus Estimate for the same was pegged at $744 million. This was due to lower drilling activity in Latin America, U.S. land and Saudi Arabia.
Revenues in the Production Systems segment amounted to $3.10 billion, up 31% from the year-ago quarter’s reported actuals. Pre-tax operating income improved 63% year over year to $519 million, which surpassed the Zacks Consensus Estimate of $486 million. The segment benefited from higher sales of surface production systems, completions and artificial lift, partially offset by reduced sales of subsea and midstream production systems.
Cash Flow & Financials
SLB reported a free cash flow of $1.81 billion in the third quarter.
As of Sept. 30, 2024, the company had approximately $4.46 billion in cash and short-term investments. It registered a long-term debt of $11.86 billion at the end of the quarter.
Outlook
SLB has reaffirmed its previous guidance of $2.6 billion for 2024 capital investment (including capex, exploration data costs and APS investments). The projected figure is in line with the year-ago quarter’s level.
Archrock is an energy infrastructure company based in the United States, with a focus on midstream natural gas compression. It provides natural gas contract compression services and generates stable fee-based revenues.
The Zacks Consensus Estimate for AROC’s 2024 EPS is pegged at $1.04. It has witnessed upward earnings estimate revisions for 2024 and 2025 in the past 60 days.
PEDEVCO is engaged in the acquisition and development of energy assets in the United States and Pacific Rim countries. PED stands to benefit significantly from its holdings in the Permian Basin, one of the most prolific oil-producing regions in the United States, as well as in the D-J Basin in Colorado, which includes more than 150 high-quality drilling locations.
The Zacks Consensus Estimate for PED’s 2024 EPS is pegged at $0.08. The company has a Value Score of B. It has witnessed upward earnings estimate revisions for 2024 in the past 60 days.
MPLX derives stable fee-based revenues from long-term contracts, with minimal exposure to commodity-price fluctuations. The partnership’s robust capital expenditure forecast for 2024, along with significant expansion initiatives, underscores its commitment to sustainable growth.
The Zacks Consensus Estimate for MPLX’s 2024 EPS is pegged at $4.29. The company has a Value Score of B. It has witnessed upward earnings estimate revisions for 2024 and 2025 in the past 60 days.
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SLB Q3 Earnings Beat Estimates, Revenues Rise Year Over Year
SLB (SLB - Free Report) reported third-quarter 2024 earnings of 89 cents per share (excluding charges and credits), which beat the Zacks Consensus Estimate of 88 cents. The bottom line also increased from the year-ago quarter’s level of 78 cents.
The oilfield service giant recorded total quarterly revenues of $9.16 billion, which missed the Zacks Consensus Estimate of $9.28 billion. The top line improved from the year-ago quarter’s figure of $8.31 billion.
The strong quarterly earnings were primarily driven by broad-based earnings growth and margin expansion, especially in the Middle East, Asia and offshore North America. Additionally, cost optimization, greater adoption of digital solutions, and contributions from long-cycle deepwater and gas projects played significant roles.
SLB Price, Consensus and EPS Surprise
SLB price-consensus-eps-surprise-chart | Schlumberger Limited Quote
Segmental Performance
Revenues in the Digital & Integration unit totaled $1,088 million, up 11% from the year-ago quarter’s level. Pre-tax operating income of $386 million was up 23% year over year. The figure also beat the Zacks Consensus Estimate of $341 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.
Revenues in the Reservoir Performance unit increased 9% year over year to $1.82 billion. Pre-tax operating income totaled $367 million, up 7% year over year. The figure missed the Zacks Consensus Estimate of $393 million. The upside in profit can be attributed to higher intervention offset by lower evaluation and flat stimulation revenues. Offshore North America and Latin America saw growth, while Europe, Africa and the Middle East & Asia experienced declines.
The Well Construction segment’s revenues fell 3% from the year-earlier quarter’s level to $3.31 billion. Pre-tax operating income decreased 6% to $714 million and the Zacks Consensus Estimate for the same was pegged at $744 million. This was due to lower drilling activity in Latin America, U.S. land and Saudi Arabia.
Revenues in the Production Systems segment amounted to $3.10 billion, up 31% from the year-ago quarter’s reported actuals. Pre-tax operating income improved 63% year over year to $519 million, which surpassed the Zacks Consensus Estimate of $486 million. The segment benefited from higher sales of surface production systems, completions and artificial lift, partially offset by reduced sales of subsea and midstream production systems.
Cash Flow & Financials
SLB reported a free cash flow of $1.81 billion in the third quarter.
As of Sept. 30, 2024, the company had approximately $4.46 billion in cash and short-term investments. It registered a long-term debt of $11.86 billion at the end of the quarter.
Outlook
SLB has reaffirmed its previous guidance of $2.6 billion for 2024 capital investment (including capex, exploration data costs and APS investments). The projected figure is in line with the year-ago quarter’s level.
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 Archrock Inc. (AROC - Free Report) , PEDEVCO Corp. (PED - Free Report) and MPLX LP (MPLX - Free Report) . While both Archrock and PEDEVCO sport a Zacks Rank #1 (Strong Buy) at present, MPLX carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Archrock is an energy infrastructure company based in the United States, with a focus on midstream natural gas compression. It provides natural gas contract compression services and generates stable fee-based revenues.
The Zacks Consensus Estimate for AROC’s 2024 EPS is pegged at $1.04. It has witnessed upward earnings estimate revisions for 2024 and 2025 in the past 60 days.
PEDEVCO is engaged in the acquisition and development of energy assets in the United States and Pacific Rim countries. PED stands to benefit significantly from its holdings in the Permian Basin, one of the most prolific oil-producing regions in the United States, as well as in the D-J Basin in Colorado, which includes more than 150 high-quality drilling locations.
The Zacks Consensus Estimate for PED’s 2024 EPS is pegged at $0.08. The company has a Value Score of B. It has witnessed upward earnings estimate revisions for 2024 in the past 60 days.
MPLX derives stable fee-based revenues from long-term contracts, with minimal exposure to commodity-price fluctuations. The partnership’s robust capital expenditure forecast for 2024, along with significant expansion initiatives, underscores its commitment to sustainable growth.
The Zacks Consensus Estimate for MPLX’s 2024 EPS is pegged at $4.29. The company has a Value Score of B. It has witnessed upward earnings estimate revisions for 2024 and 2025 in the past 60 days.