News wire — SLB raised its quarterly dividend and accelerated share repurchases on Friday after the oilfield services provider posted better than expected fourth-quarter profit, helped by higher demand for its drilling equipment and technology.The firm increased its quarterly dividend by 3.6%, and said it would buy back $2.3 billion of shares at a faster rate than typical.
“While upstream investment growth will remain subdued in the short term due to global oversupply, we anticipate the oil supply imbalance will gradually abate,” said SLB Chief Executive Officer Olivier Le Peuch, adding that the company believes its stock is undervalued relative to the strength of its business.
Shares of SLB, previously called Schlumberger, rose 2.6% to $42 in premarket trading. Analysts at TD Cowen said that while the dividend increase was small, it was “somewhat unexpected.”
SLB, which has been focusing on its international business to offset slowing North American revenue growth, posted a 3% rise in its quarterly revenue from foreign markets, the smallest growth since the first quarter of 2021, when the COVID pandemic slashed demand.
Revenue in Latin America declined 5% year-over-year, driven primarily by reduced drilling activity in Mexico, the company said. The declines were offset by 7% growth in the Middle East and Asia, on the back of robust activity in the United Arab Emirates, Iraq, Kuwait, East Asia and China.
Revenue from the international business accounts for about 80% of SLB’s total revenues.
Meanwhile, North American revenue grew 7%, the most since the second quarter of 2023, due to higher digital sales and offshore activity in the U.S. Gulf of Mexico, despite lower drilling activity on U.S. land.
Total revenue of $9.28 billion beat analysts’ average estimate of $9.18 billion, according to data compiled by LSEG.
Excluding charges and credits, SLB posted a profit of 92 cents per share for the quarter, compared with analysts’ average estimate of 90 cents.
The charges included a restructuring-related charge of $223 million.
Reporting by Arathy Somasekhar in Houston and Seher Dareen in Bengaluru. Editing by Chizu Nomiyama and Mark Potter – Reuters
