- Revenue of $9.16 billion was steady sequentially and increased 10% year on year
- GAAP EPS of $0.83 increased 8% sequentially and 6% year on year
- EPS, excluding charges and credits, of $0.89 increased 5% sequentially and 14% year on year
- Net income attributable to SLB of $1.19 billion increased 7% sequentially and 6% year on year
- Adjusted EBITDA of $2.34 billion increased 2% sequentially and 13% year on year
- Cash flow from operations was $2.45 billion and free cash flow was $1.81 billion
- Board approved quarterly cash dividend of $0.275 per share
(BUSINESS WIRE) -- SLB (NYSE: SLB) today announced results for the third quarter of 2024.
Third-Quarter Results
| (Stated in millions, except per share amounts) | |||||||||
| Three Months Ended | Change | ||||||||
| Sept. 30, 2024 | Jun. 30, 2024 | Sept. 30, 2023 | Sequential | Year-on-year | |||||
| Revenue | $9,159 | $9,139 | $8,310 | - | 10% | ||||
| Income before taxes - GAAP basis | $1,507 | $1,421 | $1,395 | 6% | 8% | ||||
| Income before taxes margin - GAAP basis | 16.5% | 15.5% | 16.8% | 91 bps | -33 bps | ||||
| Net income attributable to SLB - GAAP basis | $1,186 | $1,112 | $1,123 | 7% | 6% | ||||
| Diluted EPS - GAAP basis | $0.83 | $0.77 | $0.78 | 8% | 6% | ||||
|
| ||||||||
| Adjusted EBITDA* | $2,343 | $2,288 | $2,081 | 2% | 13% | ||||
| Adjusted EBITDA margin* | 25.6% | 25.0% | 25.0% | 55 bps | 54 bps | ||||
| Pretax segment operating income* | $1,902 | $1,854 | $1,683 | 3% | 13% | ||||
| Pretax segment operating margin* | 20.8% | 20.3% | 20.3% | 48 bps | 51 bps | ||||
| Net income attributable to SLB, excluding charges & credits* | $1,271 | $1,224 | $1,123 | 4% | 13% | ||||
| Diluted EPS, excluding charges & credits* | $0.89 | $0.85 | $0.78 | 5% | 14% | ||||
| Revenue by Geography | |||||||||
| International | $7,425 | $7,452 | $6,614 | - | 12% | ||||
| North America | 1,687 | 1,644 | 1,643 | 3% | 3% | ||||
| Other | 47 | 43 | 53 | n/m | n/m | ||||
$9,159 | $9,139 | $8,310 | - | 10% | |||||
| (Stated in millions) | |||||||||
| Three Months Ended | Change | ||||||||
| Sept. 30, 2024 | Jun. 30, 2024 | Sept. 30, 2023 | Sequential | Year-on-year | |||||
| Revenue by Division | |||||||||
| Digital & Integration | $1,088 | $1,050 | $982 | 4% |
| 11% | |||
| Reservoir Performance | 1,823 | 1,819 | 1,680 | - |
| 9% | |||
| Well Construction | 3,312 | 3,411 | 3,430 | -3% |
| -3% | |||
| Production Systems | 3,103 | 3,025 | 2,367 | 3% |
| 31% | |||
| Other | (167) | (166) | (149) | n/m | n/m | ||||
$9,159 | $9,139 | $8,310 | - |
| 10% | ||||
| Pretax Operating Income by Division |
|
|
| ||||||
| Digital & Integration | $386 | $325 | $314 | 19% |
| 23% | |||
| Reservoir Performance | 367 | 376 | 344 | -2% |
| 7% | |||
| Well Construction | 714 | 742 | 759 | -4% |
| -6% | |||
| Production Systems | 519 | 473 | 319 | 10% |
| 63% | |||
| Other | (84) | (62) | (53) | n/m |
| n/m | |||
$1,902 | $1,854 | $1,683 | 3% | 13% | |||||
|
|
| |||||||
| Pretax Operating Margin by Division |
|
|
| ||||||
| Digital & Integration | 35.5% | 31.0% | 32.0% | 456 bps |
| 353 bps | |||
| Reservoir Performance | 20.1% | 20.6% | 20.5% | -53 bps |
| -37 bps | |||
| Well Construction | 21.5% | 21.7% | 22.1% | -19 bps |
| -58 bps | |||
| Production Systems | 16.7% | 15.6% | 13.5% | 110 bps |
| 325 bps | |||
| Other | n/m | n/m | n/m | n/m |
| n/m | |||
20.8% | 20.3% | 20.3% | 48 bps |
| 51 bps | ||||
| SLB acquired the Aker subsea business during the fourth quarter of 2023 in connection with the formation of the OneSubsea joint venture. The acquired business generated revenue of $532 million during the third quarter of 2024. Excluding the impact of this acquisition, SLB's global third-quarter 2024 revenue increased 4% year on year; international third-quarter 2024 revenue increased 4% year on year; and Production Systems third-quarter 2024 revenue increased 9% year on year. | |||||||||
| *These are non-GAAP financial measures. See sections titled "Divisions" and Supplementary Information" for details. | |||||||||
| n/m = not meaningful | |||||||||
SLB Expands Margins and Earnings, Despite Cautious Macro Environment
“SLB delivered strong third-quarter results, achieving earnings growth and margin expansion in line with our full-year adjusted EBITDA margin goal of 25% or higher,” said SLB Chief Executive Officer Olivier Le Peuch. “These results were achieved by our ongoing focus on cost optimization, greater adoption of our digital products and solutions, and the contribution of long-cycle projects in deep water and gas.
“This performance was achieved despite an environment where short-cycle activity growth softened, and some international producers exercised cautious spending triggered by lower oil prices and ample global supply, while land activity in the U.S. remained subdued. Revenue grew in the Middle East & Asia and offshore North America but was offset by a decline in Latin America, while Europe & Africa held steady,” Le Peuch said.
Digital Leads Results as Customers Focus on Cloud Computing and Automation
“As we continue to see the transformative impact of digital technology across the industry, we delivered a 4% sequential increase in Digital & Integration revenue. This was driven by our digital business, which grew 7% sequentially and 25% year on year. Digital & Integration pretax segment operating margin expanded by 456 basis points (bps) sequentially, mostly driven by our digital business.
“Our customers are increasingly embracing digital technology to shorten planning cycle times, boost automation, and extract efficiency. Our cloud-based platform offerings have emerged as integral tools for unlocking data and AI across the energy value chain, enabling data-driven decision-making and streamlined operations. Our leadership in this area was on full display as we welcomed more than 1,000 customers and partners to the SLB Digital Forum in September to share progress, innovate together, and explore new digital opportunities.
“At the event, we announced exciting new collaborations and partnerships with NVIDIA, Amazon Web Services, Aramco, and others. Additionally, we launched the Lumi™ data and AI platform, which integrates advanced AI capabilities—including generative AI—with workflows across the energy value chain. More details can be found in the quarterly highlights of this release.
“In the Core Divisions—comprising Reservoir Performance, Well Construction, and Production Systems—revenue was essentially flat sequentially. Production Systems revenue increased 3% sequentially, posting record quarterly revenue with pretax segment operating margin expanding year on year for the ninth consecutive quarter. Reservoir Performance revenue was flat sequentially, while Well Construction revenue declined by 3% due to lower drilling activities,” Le Peuch said.
With Strong Cash Flow, SLB Accelerates Returns to Shareholders
“Overall, in the third quarter, we achieved an adjusted EBITDA margin of 25.6%, a 55-bps sequential increase. Cash flow from operations was $2.45 billion, and free cash flow was $1.81 billion. Additionally, we returned close to $900 million to shareholders through stock repurchases and dividends, bringing total return to shareholders for the first nine months of the year to $2.38 billion.
“With strong cash flows and visibility into continued strong cash flow generation, we have accelerated our share repurchase program, taking advantage of current share price levels. We now expect to exceed the $3.0 billion return to shareholders commitment we made earlier this year.
“I would like to thank the SLB team for their unwavering dedication and outstanding execution, consistently delivering for both our customers and shareholders,” Le Peuch said.
International, Digital, and Cost Optimization to Remain the Focus
“Although some customers have adopted a more cautious approach to their near-term capital expenditures and discretionary spending amid lower commodity prices, most projects are progressing as planned. Recent geopolitical events have further highlighted the importance of long-term energy security and reducing potential supply disruptions.
“SLB is well positioned to navigate the evolving market conditions by leveraging its unique exposure to long-cycle projects in international, deepwater, and gas markets. Additionally, SLB’s digital leadership and growing presence in emerging low-carbon markets—such as carbon capture and storage and geothermal—are supporting a more balanced portfolio.
“Although the rate of upstream spending growth has moderated in the last few months due to the macroenvironment, we continue to expect a sustained level of upstream investment in the years to come. In this context, we anticipate delivering strong cash flows and a full-year adjusted EBITDA margin at or above 25%, supported by our international leadership, robust digital sales, and ongoing cost optimization initiatives.
“Overall, our business remains well positioned to deliver further margin expansion and increased returns to shareholders,” Le Peuch said.
Other Events
During the quarter, SLB repurchased 11.3 million shares of its common stock for a total purchase price of $501 million. For the first nine months of the year, SLB repurchased a total of 26.6 million shares of its common stock for a total purchase price of $1.24 billion.
On October 17, 2024, SLB entered into a definitive agreement to sell its working interests in the Palliser Block located in Alberta, Canada. The transaction, which is subject to regulatory approval and other customary closing conditions, is expected to close late in the fourth quarter of 2024.
On October 17, 2024, SLB’s Board of Directors approved a quarterly cash dividend of $0.275 per share of outstanding common stock, payable on January 9, 2025, to stockholders of record on December 4, 2024.