SLB Boosts Dividend and Share Repurchases Amid Strong Q4 Performance
The oilfield services giant, SLB, has announced a 3.6% increase in its quarterly dividend and an accelerated share repurchase program, totaling $2.3 billion. This move comes on the heels of a better-than-expected fourth-quarter profit, driven by rising demand for its drilling equipment and technology.
Upbeat Outlook Despite Global Oversupply
According to SLB’s CEO, Olivier Le Peuch, the company believes its stock is undervalued relative to its business strength. While upstream investment growth is expected to remain subdued in the short term due to global oversupply, Le Peuch anticipates the oil supply imbalance will gradually abate.
Shares Surge in Premarket Trading
SLB’s shares rose 2.6% to $42 in premarket trading, following the announcement. Analysts at TD Cowen noted that the dividend increase, although small, was somewhat unexpected.
International Business Drives Growth
SLB’s international business, which accounts for approximately 80% of its total revenue, posted a 3% rise in quarterly revenue. This growth was driven by a 7% increase in revenue from the Middle East and Asia, offsetting a 5% decline in Latin America. The company attributed the decline in Latin America to reduced drilling activity in Mexico.
North American Revenue Sees Significant Growth
In contrast, North American revenue grew 7%, the most since the second quarter of 2023. This surge was driven by higher digital sales and offshore activity in the U.S. Gulf of Mexico, despite lower drilling activity on U.S. land.
Strong Q4 Performance Beats Estimates
SLB’s total revenue of $9.28 billion exceeded analysts’ average estimate of $9.18 billion. Excluding charges and credits, the company posted a profit of 92 cents per share, surpassing analysts’ average estimate of 90 cents. The charges included a restructuring-related charge of $223 million.
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