SLB Q2 Earnings Surpass Estimates, Revenues Increase Y/Y
SLB SLB has reported second-quarter 2023 earnings of 72 cents per share (excluding charges and credits), beating the Zacks Consensus Estimate by a penny. The bottom line significantly increased from the year-ago quarter’s earnings of 50 cents.
The oilfield service giant recorded total quarterly revenues of $8,099 million, missing the Zacks Consensus Estimate of $8,235 million. However, the top line improved from the year-ago quarter’s $6,773 million.
Strong quarterly earnings have been primarily driven by higher stimulation services and strong activities across all areas.
Schlumberger Limited Price, Consensus and EPS Surprise
Schlumberger Limited price-consensus-eps-surprise-chart | Schlumberger Limited Quote
Segmental Performance
Revenues in the Digital & Integration unit totaled $947 million, down 1% from the year-ago quarter’s levels. Pre-tax operating income of $322 million was down 15%. The underperformance resulted from a decline in revenues from Asset Performance Solutions (APS) developments. Lower exploration data license sales also hurt the segment.
Revenues in the Reservoir Performance unit increased 23% year over year to $1,643 million. Pre-tax operating income was $306 million, rising 57%. The upside in profit was led by higher intervention and stimulation services.
Revenues in the Well Construction segment rose 25% from the year-earlier quarter’s level to $3,362 million. Pre-tax operating income improved 55% to $731 million. Strong growth across all areas aided the segment. The increases were primarily driven by strong measurements, fluids and equipment sales activities, and pricing improvements worldwide.
Revenues in the Production Systems segment amounted to $2,313 million, up 22% from the year-ago quarter’s numbers. Pre-tax operating income improved 63% year over year to $278 million. The segment was aided by strong activities across all areas.
Cash Flow & Financials
SLB reported a free cash flow of $986 million in the second quarter.
As of Jun 30, 2023, the company had approximately $3,194 million in cash and short-term investments. It had a long-term debt of $11,342 million at the end of the second quarter.
Outlook
In the second half of 2023, SLB expects the free cash flow generation to be considerably higher than the first half. This makes it well-positioned to outperform last year’s free cash flow.
Zacks Rank & Stocks to Consider
Currently, SLB carries a Zacks Rank #3 (Hold).
Some better-ranked players in the energy space are NuStar Energy, L.P. NS, Oceaneering International, Inc. OII and Seadrill Limited SDRL, currently sporting a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The majority of NuStar’s business is derived from an attractive set of fee-based storage and transportation assets that support the U.S. and international energy infrastructure. NS has a Zacks Style Score of A for Growth and B for Value.
NuStar has witnessed upward earnings estimate revisions for 2023 and 2024 in the past seven days. The consensus estimate for NS’ 2023 and 2024 earnings per share is pegged at $1.09 and $1.12, respectively.
One of the leading suppliers of integrated technology solutions, Oceaneering boasts an impressive portfolio of diversified products and services. OII has a Zacks Style Score of B for Growth.
Oceaneering has witnessed upward earnings estimate revisions for 2023 and 2024 in the past 60 days. The consensus estimate for OII’s 2023 and 2024 earnings per share is pegged at $1.12 and $1.29, respectively.
Seadrill is a market-leading international driller with strong exposure in key strategic basins like the U.S. Gulf of Mexico, Brazil and Angola.
Seadrill has witnessed upward earnings estimate revisions for 2023 and 2024 in the past 60 days. The consensus estimate for SDRL’s 2023 and 2024 earnings per share is pegged at $2.93 and $4.01, respectively.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Schlumberger Limited (SLB) : Free Stock Analysis Report
NuStar Energy L.P. (NS) : Free Stock Analysis Report
Oceaneering International, Inc. (OII) : Free Stock Analysis Report
Seadrill Limited (SDRL) : Free Stock Analysis Report
