Schlumberger's Q4 Earnings Beat, Dividend Boost, and Offshore Boom
Friday, Jan 17, 2025 9:16 am ET
3min read Schlumberger Limited (SLB), the world's leading oilfield services provider, reported fourth-quarter earnings that surpassed analyst expectations, driving a 4.1% increase in its stock price in premarket trading. The company's strong performance was driven by growth in its Digital & Integration and Production Systems segments, with adjusted EPS of $0.92, up 7% year-over-year and ahead of the $0.90 consensus estimate. Revenue rose 3% to $9.28 billion, also topping forecasts.
Schlumberger's board of directors approved a 3.6% increase in the quarterly cash dividend, from $0.275 to $0.285 per share, effective April 3, 2025. Additionally, the company entered into accelerated share repurchase (ASR) transactions to repurchase $2.3 billion of its common stock, signaling its belief that the stock is undervalued relative to the strength of its business. These moves position Schlumberger to increase total return to shareholders from $3.3 billion in 2024 to a minimum of $4 billion in 2025.
The offshore drilling market has been reaping the benefits of the ongoing upcycle, with rising demand and tightening supply bringing higher day rates and fleet utilization. Schlumberger's offshore drilling services contributed to the company's strong fourth-quarter performance. Westwood Global Energy, an energy market research and consultancy firm, predicts further utilization boosts and increased day rate fixtures in 2024, driven by demand growth in India, Southeast Asia, South America, and West Africa.
Schlumberger's international revenue growth in 2024 was driven by several key factors, including growth in the Middle East & Asia and Europe & Africa regions, increased demand for digital and new energy businesses, and strong performance in offshore drilling. The company's strategic focus on these areas positions it to capitalize on emerging opportunities and maintain its international revenue growth momentum in the long term.
In conclusion, Schlumberger's Q4 earnings beat, dividend boost, and offshore boom highlight the company's strong performance and positive outlook. The company's strategic focus on digital and new energy businesses, combined with its robust offshore drilling services, positions it well for continued growth and success in the global energy market.
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