SLB N.V. SLB reported third-quarter 2026 adjusted earnings per share (EPS) of 64 cents, beating the Zacks Consensus Estimate of 62 cents by 3.2%. The bottom line declined 7.2% from 69 cents in the year-ago quarter.
The oilfield services giant recorded quarterly revenues of $9.45 billion, topping the consensus estimate of $9.29 billion by 1.7%. The top line increased 5.8% year over year.
Better-than-expected results were supported by strong Production Systems performance, ChampionX contributions and recovering Middle East activity.
Digital annualized recurring revenues reached $1.04 billion, up 13% year over year.
SLB Limited Price, Consensus and EPS Surprise
SLB Limited Price, Consensus and EPS Surprise
SLB Limited price-consensus-eps-surprise-chart | SLB Limited Quote
SLB’s Geographic Results Reflect Broad Growth
International revenues increased 1% year over year to $6.99 billion. North America revenues rose 24% to $2.40 billion, supported by stronger unconventional activity and ChampionX contributions. Excluding the acquisition, North America revenues increased 13%.
Latin America revenues rose 18% year over year to $1.75 billion, supported by stronger offshore activity in Brazil, Guyana and Mexico. Europe and Africa revenues remained largely flat at $2.44 billion, reflecting mixed activity across regional markets.
Middle East and Asia revenues declined 6% year over year to $2.81 billion due to conflict-related disruptions. However, revenues increased 9% sequentially, supported by recovering activity in Iraq, Kuwait, Oman, Saudi Arabia and other regional markets.
SLB’s Digital Business Maintains Momentum
Digital revenues increased 5% year over year to $693 million from $658 million. Growth was driven by stronger Digital Operations activity and higher Platforms and Applications sales, partially offset by reduced Professional Services and Digital Exploration revenues.
The division’s pretax operating income increased 4% year over year to $194 million. However, pretax operating margin contracted 36 basis points to 28%, reflecting lower exploration data license sales and transfer fees. Improved profitability across Digital Operations and Platforms and Applications partially offset the pressure.
SLB’s Core Segments Deliver Mixed Results
Reservoir Performance revenues declined 3% year over year to $1.63 billion. Reduced Middle East activity and weaker unconventional operations in Argentina affected performance. Pretax operating income fell 15% to $266 million, while the corresponding margin contracted 223 basis points to 16.3%.
Well Construction revenues decreased 3% year over year to $2.89 billion, primarily due to lingering Middle East disruptions. Strong offshore drilling activity across Latin America, Europe and Africa partially offset the decline. Pretax operating income dropped 15% to $475 million.
However, both divisions recorded sequential revenue increases of 5%, reflecting a recovery in Middle East drilling, evaluation and intervention activity.
SLB’s Production Systems Strengthens Results
Production Systems revenues increased 15% year over year to $4 billion, driven primarily by ChampionX’s production chemicals and artificial lift businesses. These operations contributed $950 million in quarterly revenues compared with $575 million in the year-ago period.
Excluding ChampionX, divisional revenues increased 5% year over year, supported by stronger SLB OneSubsea, valves and completions activity.
Pretax operating income increased 16% to $646 million. The segment’s pretax operating margin remained broadly stable at 16.1%, supported by improved offshore profitability and contributions from ChampionX.
SLB’s Profitability Faces Margin Pressure
Net income attributable to SLB totaled $735 million, down 1% year over year. GAAP earnings declined to 49 cents per share from 50 cents in the prior-year quarter.
Adjusted EBITDA was $2.07 billion, essentially flat year over year. The adjusted EBITDA margin contracted 121 basis points to 21.9%, reflecting continued pressure from lower Middle East activity despite sequential operational improvements.
Pretax segment operating income decreased 3% to $1.58 billion, while the corresponding margin contracted 153 basis points to 16.7%.
SLB Generates Strong Cash Flow
Cash provided by operating activities totaled $1.51 billion in the third quarter, while free cash flow reached $828 million. Capital expenditures were $485 million.
As of Sep. 30, 2026, SLB had cash and short-term investments of $3.55 billion, long-term debt of $11.15 billion and net debt of $9.25 billion.
The company repurchased 12.9 million shares for $656 million during the quarter. Its board approved a quarterly cash dividend of 29.5 cents per share, payable Jan. 7, 2027, to shareholders of record as of Dec. 2, 2026.
SLB Expands Data Center Business & 2027 Opportunities
Data Center Solutions revenues surged 76% year over year to $230 million, reflecting growing demand for critical infrastructure and modular data center solutions.
SLB agreed to acquire Kelvion for approximately $3.4 billion in cash, including the assumption of roughly $700 million in debt. The transaction is expected to close in the first half of 2027.
Management anticipates stronger international activity in 2027, supported by deepwater developments, increased Venezuelan operations and expanding digital opportunities. The company maintained its full-year 2026 capital investment guidance at approximately $2.5 billion.
SLB’s Zacks Rank & Stocks to Consider
SLB currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks from the energy sector that are yet to release their third-quarter 2026 earnings are Baker Hughes Company BKR, ConocoPhillips COP) and Equinor ASA EQNR. BKR, COP and EQNR currently sport a Zacks Rank #1 (Strong Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.
Baker Hughes is scheduled to release third-quarter 2026 earnings on Oct. 27. The Zacks Consensus Estimate for BKR’s earnings is pegged at 64 cents per share, suggesting a 5.9% decline from the prior-year reported figure.
ConocoPhillips is scheduled to release third-quarter 2026 earnings on Nov. 5. The Zacks Consensus Estimate for COP’s earnings is pegged at $2.86 per share, suggesting a 77.6% improvement from the prior-year reported figure.
Equinor is scheduled to release third-quarter 2026 earnings on Oct. 28. The Zacks Consensus Estimate for EQNR’s earnings is pegged at $1.38 per share, suggesting a 273% improvement from the prior-year reported figure.
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SLB Limited (SLB) : Free Stock Anal
Source: finance.yahoo.com — article syndicated from the publisher’s feed; all rights remain with the original publisher.
