SLB SLB reported fourth-quarter 2024 earnings of 92 cents per share (excluding charges and credits), which beat the Zacks Consensus Estimate of 90 cents. The bottom line also increased from the year-ago quarter’s level of 86 cents.

The oilfield service giant recorded total quarterly revenues of $9.28 billion, which beat the Zacks Consensus Estimate of $9.18 billion. The top line improved from the year-ago quarter’s figure of $8.99 billion.

The strong quarterly earnings were primarily driven by broad-based earnings growth and margin expansion, especially in the Middle East and Asia. Additionally, advancements in AI and autonomous operations continue to contribute significantly to SLB’s growth.

SLB Price, Consensus and EPS Surprise

SLB price-consensus-eps-surprise-chart | SLB Quote

Segmental Performance

Revenues in the Digital & Integration unit totaled $1,156 million, up 10% from the year-ago quarter’s level. Pre-tax operating income of $442 million was up 24% year over year. The figure also beat the Zacks Consensus Estimate of $409 million.

The unit's revenues grew year over year, primarily due to greater adoption of digital technologies and higher sales of exploration data. Asset Performance Solutions revenues, however, remained unchanged sequentially.

Revenues in the Reservoir Performance unit increased 4% year over year to $1.81 billion. Pre-tax operating income totaled $370 million, which remained flat year over year. The figure beat the Zacks Consensus Estimate of $362 million. The upside in profit can be attributed to higher intervention and simulation activity offset by lower evaluation revenues. The top line was affected by lower stimulation and intervention work in Saudi Arabia, offset by increased activity in the rest of the Middle East & Asia and North America.

The Well Construction segment’s revenues fell 5% from the year-earlier quarter’s level to $3.27 billion. Pre-tax operating income decreased 12% to $681 million and the Zacks Consensus Estimate for the same was pegged at $683 million. This was due to lower drilling activity in Mexico and Saudi Arabia, partially mitigated by higher activity across the rest of the Middle East & Asia. 

Revenues in the Production Systems segment amounted to $3.19 billion, up 9% from the year-ago quarter’s reported actuals. Pre-tax operating income improved 14% year over year to $506 million, which missed the Zacks Consensus Estimate of $520 million. The segment benefited from strong sales, both in North America and internationally, across most of the portfolio.

Cash Flow & Financials

SLB reported a free cash flow of $1.63 billion in the fourth quarter.

As of Dec. 31, 2024, the company had approximately $4.67 billion in cash and short-term investments. It registered a long-term debt of $11.02 billion at the end of the quarter.

Outlook

SLB expects full-year 2025 capital investment (including capex, exploration data costs and APS investments) to be approximately $2.3 billion. The projected figure is lower than the 2024 level of $2.6 billion.

Zacks Rank & Stocks to Consider

SLB currently carries a Zacks Rank #5 (Strong Sell).

Investors interested in the energy sector may look at some better-ranked stocks like SM Energy Company SM, Sunoco LP SUN and TechnipFMC plc FTI. While SM Energy and Sunoco presently sport a Zacks Rank #1 (Strong Buy) each, TechnipFMCcarries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

SM Energy is set to expand its oil-centered operations in the coming years, with an increasing focus on crude oil, especially in the Permian Basin and Eagle Ford regions. The company’s attractive oil and gas investments should create long-term value for shareholders.

Sunoco is a leading wholesale motor fuel distributor in the United States, boasting a vast distribution network spanning 40 states. With long-term contracts servicing more than 10,000 convenience stores, it distributes over 10 fuel brands, ensuring a stable revenue stream. Sunoco is poised to benefit from the strategic acquisitions aimed at diversifying its business portfolio.

TechnipFMC is a leading manufacturer and supplier of products, services and fully integrated technology solutions for the energy industry. It focuses on the subsea segment in offshore basins worldwide. FTI’s growing backlog ensures strong revenue visibility and supports margin improvements.

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