Yahoo Finance SLB Q1 Earnings Beat Estimates, Revenues Rise Year Over Year
SLB SLB reported first-quarter 2024 earnings of 75 cents per share (excluding charges and credits), which beat the Zacks Consensus Estimate of 74 cents. The bottom line increased from the year-ago quarter’s level of 63 cents.
The oilfield service giant recorded total quarterly revenues of $8.71 billion, which beat the Zacks Consensus Estimate of $8.69 billion. The top line also improved from the year-ago quarter’s figure of $7.74 billion.
Strong quarterly earnings were primarily driven by higher evaluation and stimulation activities in the international market. Roughly half of the revenue growth (compared with the prior-year level) stemmed from the Aker subsea business, which was integrated through the OneSubsea joint venture in the fourth quarter of 2023.
SLB Price, Consensus and EPS Surprise
SLB price-consensus-eps-surprise-chart | SLB Quote
Segmental Performance
Revenues in the Digital & Integration unit totaled $953 million, up 7% from the year-ago quarter’s level. Pre-tax operating income of $254 million was down 4% year over year. The figure also missed the Zacks Consensus Estimate of $288 million.
The unit’s revenues increased year over year, driven by digital sales growth in international markets, while Asset Performance Solutions revenues were flat.
Revenues in the Reservoir Performance unit increased 15% year over year to $1.73 billion. Pre-tax operating income totaled $339 million, up 40% year over year. The figure also beat the Zacks Consensus Estimate of $320 million. The upside in profit was led by higher evaluation and stimulation activities across the international market, especially in the Middle East and Asia.
Revenues in the Well Construction segment rose 3% from the year-earlier quarter’s level to $3.37 billion. Pre-tax operating income improved 3% to $690 million and the Zacks Consensus Estimate for the same was pegged at $719 million. The segment received a boost from growth in the Middle East and Asia, partially offset by declining revenues and margin contraction in North America.
Revenues in the Production Systems segment amounted to $2.82 billion, up 28% from the year-ago quarter’s actuals. Pre-tax operating income improved 95% year over year to $400 million, which surpassed the Zacks Consensus Estimate of $384 million. The segment benefited from strong sales of midstream, artificial lift and subsea production systems. Its performance was driven by an improved activity mix, execution efficiency and conversion of improved-price backlog.
Cash Flow & Financials
SLB reported a negative free cash flow of $222 million in the first quarter.
As of Mar 31, 2024, the company had approximately $3.49 billion in cash and short-term investments. It had a long-term debt of $10.74 billion at the end of the first quarter.
Outlook
SLB has reaffirmed its previous guidance of mid-teens EBITDA growth for the full year. The anticipated capital investment for full-year 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 #3 (Hold).
Investors interested in the energy sector may look at some better-ranked companies like Murphy USA Inc. MUSA, SM Energy Company SM and Enerplus Corporation ERF, each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Murphy USA is a leading independent retailer of motor fuel and convenience merchandise in the United States.
The Zacks Consensus Estimate for MUSA’s 2024 EPS is pegged at $26.40. The company has a Zacks Style Score of B for Growth and B for Value. It has witnessed upward earnings estimate revisions for 2024 in the past 30 days.
SM Energy Company is an independent oil and gas company engaged in the exploration, exploitation, development, acquisition, and production of oil and gas in North America. SM currently has a Momentum Score of B and a Value Score of B.
The Zacks Consensus Estimate for SM’s 2024 and 2025 EPS is pegged at $6.15 and $6.73, respectively. The stock has witnessed upward earnings estimate revisions for 2025 in the past seven days.
Enerplus is an independent oil and gas production company, with resources across Western Canada and the United States.
Enerplus has witnessed upward earnings estimate revisions for 2024 and 2025 in the past 30 days. The consensus estimate for ERF’s 2024 and 2025 earnings per share is pegged at $2.06 and $2.36, respectively.
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