Written by Aarathi Somasekhar and Sahar Darren
(Reuters) – Oilfield company SLB raised its quarterly dividend and accelerated share buybacks on Friday as its fourth-quarter profit beat expectations, while also warning of flat 2025 revenue due to excess oil supply.
The world’s largest oil field services company increased its quarterly profits by 3.6%, and said it would buy back shares worth $2.3 billion at an “accelerated” pace.
Shares of SLB, formerly called Schlumberger, rose 7.4% to $44.13 at midday.
The company said that revenues for the first quarter and the full year will be largely unchanged from the same periods last year, as excess oil supplies limit oil field activity.
Adjusted EBITDA for 2025 is expected to be at or above 2024 levels, while current quarter earnings will be similar to last year’s level.
“Clients have adopted a more cautious approach to near-term activity and discretionary spending, driven primarily by fears of oversupply in the market,” said Olivier Le Bouche, CEO of SLB.
Le Bush added that global upstream investment this year will be largely flat compared to 2024, with growth in the United Arab Emirates, Kuwait, Iraq, China and India offset by declines in Saudi Arabia, Egypt and Mexico.
Le Bush said activity will pick up in the second quarter, especially in international markets, where he expects the oil supply imbalance to “gradually decline.”
SLB, which is focusing on its international business to offset slowing North American revenue growth, posted a 3% increase in its quarterly revenue from overseas markets, the smallest growth since the first quarter of 2021 when the COVID-19 pandemic depressed demand.
Revenue in Latin America declined 5% year over year, primarily driven by lower drilling activity in Mexico, the company said. These declines were offset by 7% growth in the Middle East and Asia.
International business represents approximately 80% of SLB’s total revenue.
North American revenue grew 7%, the most growth since the second quarter of 2023, driven by higher digital sales and offshore activity in the US Gulf of Mexico. Onshore drilling activity in the United States declined.
Revenue from SLB’s operations in Russia is also declining, accounting for 4% of its total revenue, down from 5% a year earlier, the company said.
It said it believes the voluntary measures it has taken in 2023, such as halting shipments of products and technology to Russia from all SLB facilities worldwide, are consistent with US sanctions imposed on Russia this month.
https://media.zenfs.com/en/reuters-finance.com/750f58fbb647d468b1d87de40dc76119
Source link