UPDATE 3-SLB beats on fourth-quarter profit on strong international demand
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Oilfield services firm tops analysts' fourth-quarter EPS outlook
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Middle East conflict has not affected its operations -CEO
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Acquisition of subsea equipment business drives revenue gain
(Adds details on earnings paragraphs 6-7, analyst comments paragraphs 8-9, share repurchase paragraph 10, shares in last paragraph)
By Arathy Somasekhar and Arunima Kumar
HOUSTON, Jan 19 (Reuters) - SLB beat analysts' estimates for quarterly profit on Friday and said it expects strong growth in its international business this year as offshore and overseas drilling boosted demand for its oilfield services and equipment.
Schlumberger has benefited in recent years from rising international oil exploration and production, primarily from the Middle East, Angola, and Central and East Africa, as U.S. shale firms slowed drilling activity.
The war in Gaza between Israel and Islamist group Hamas and recent attacks by Iran-backed Yemeni militant group Houthis on ships in the Red Sea have not affected SLB's Middle East business, the company said.
"We do not anticipate a significant impact on the sector's overall activity, absent any escalation," SLB Chief Executive Olivier Le Peuch said in a statement.
SLB expects record investment levels in the Middle East extending beyond 2025, and sees continued offshore activity in Brazil, West Africa, the Eastern Mediterranean, the Middle East, and Southeast Asia, Le Peuch said.
Revenue from international operations rose 18% to $7.29 billion in the year's final quarter while North America remained flat. Results benefited from the acquisition of a subsea equipment business, which accounted for 70% of the quarter's sequential revenue gain, the company said.
Pretax profits rose sharply in its production systems and reservoir performance divisions, which more than offset a decline in the digital and integration unit.
"Oilfield services companies will have to contend with OPEC production constraints and some geopolitical risks that have emerged," said Peter McNally, an analyst at research firm Third Bridge.
The flat revenue in North America effectively closes the "chapter of growth that began post-pandemic," he added.
The company, formerly called Schlumberger, reported net income, excluding charges and credits, of 86 cents per share, for the three months ended Dec. 31, 2 cents above analysts' average estimate, according to LSEG data.
The company also raised its quarterly cash dividend by 10% and said it plans to increase share repurchases in 2024.
Shares of SLB were up 1% at $49.05 in pre-market trading. (Reporting by Arunima Kumar in Bengaluru; Editing by Sriraj Kalluvila and Chizu Nomiyama)
