HOUSTON - SLB (NYSE: SLB), a leading technology provider for the energy sector, reported a decrease in both revenue and net income for the first quarter of 2025. Revenue fell 3% to $8.49 billion compared to the same period last year, while net income attributable to SLB decreased by 25% to $797 million year on year. According to InvestingPro data, the company maintains strong fundamentals with a healthy current ratio of 1.45 and operates with a moderate debt level. Analysis suggests SLB is currently undervalued based on InvestingPro’s Fair Value calculations.
The company’s GAAP earnings per share (EPS) dropped 22% to $0.58, and EPS, excluding charges and credits, was down by 4% to $0.72. Adjusted EBITDA also saw a slight decline of 2% to $2.02 billion. Despite recent challenges, SLB maintains robust profitability metrics, with a return on equity of 22% and a gross profit margin of 20.7% over the last twelve months.
Despite a year-on-year increase in cash flow from operations, which rose by $333 million to $660 million, the overall financial performance reflected market softness and challenges in certain international markets. The Board approved a quarterly cash dividend of $0.285 per share. InvestingPro analysis reveals SLB has maintained dividend payments for 55 consecutive years and has raised its dividend for 3 consecutive years, demonstrating strong commitment to shareholder returns. The current dividend yield stands at 3.26%.
SLB CEO Olivier Le Peuch commented on the performance, highlighting the company’s resilience in changing market conditions and its continuous exercise of cost discipline. He also noted the strength of SLB’s digital business and the Production Systems division, which contributed to margin growth.
In the Core divisions, there was a 4% year-on-year decline in combined revenue. However, the Production Systems division reported a 4% revenue growth and an expanded pretax operating margin, driven by strong demand for surface production systems, completions, and artificial lift.
The company’s digital and AI businesses showed growth, increasingly decoupled from upstream cycle dynamics, with digital revenue growing 17% year on year.
Looking forward, SLB is committed to returning a minimum of $4 billion to shareholders in 2025 through dividends and share repurchases. This commitment comes amidst potential shifts in global economic conditions, commodity prices, and upstream oil and gas investment.
In other events, SLB entered into an agreement to purchase Interactive Network Technologies, Inc. (INT) on February 2, 2025, and completed an accelerated share repurchase transaction in April. Additionally, SLB announced progress with the United Kingdom Competition and Markets Authority regarding its acquisition of ChampionX.
This article is based on a press release statement and reflects the company’s performance and strategic direction in the first quarter of 2025. For deeper insights into SLB’s financial health, valuation, and growth prospects, including 6 additional exclusive ProTips and comprehensive analysis, visit InvestingPro, where you’ll find detailed research reports and expert analysis covering 1,400+ top stocks.
In other recent news, Schlumberger Limited (SLB) has secured a significant drilling contract for the Trion development project offshore Mexico, awarded by Woodside Energy. This contract involves the delivery of 18 ultra-deepwater wells over three years, utilizing AI-enabled drilling capabilities. In earnings-related developments, RBC Capital Markets has adjusted its financial outlook on SLB, reducing the price target to $55 from $57, while maintaining an Outperform rating. The firm noted the closing of the CHX acquisition as a significant event for SLB, with some regulatory delays expected in Norway and the UK.
Jefferies also revised its price target for SLB, lowering it to $59 from $60, but reaffirmed a Buy rating. The firm highlighted investor interest in SLB due to its underperformance over the past 18 months and the sector’s general derating. Stifel analysts maintained their Buy rating on SLB with a price target of $31.95, emphasizing the company’s strong international presence and robust free cash flow generation. They noted that 81% of SLB’s projected 2024 revenue is expected to come from outside North America, providing a buffer against market fluctuations.
Meanwhile, the energy sector faced a downturn as crude oil prices tested $56, impacting companies like SLB, which saw significant declines in premarket trading. This movement reflects broader market concerns over the escalating trade war and its potential impact on global energy demand. These recent developments highlight the various factors influencing SLB’s financial outlook and market position.
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