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SLB (NYSE:SLB) +2.3% in Friday's trading after beating estimates for Q4 adjusted earnings, driven by strong growth in its international business while North America remained relatively flat.
The former Schlumberger reported Q4 net income rose to $1.11B, or $0.77/share, from $1.07B, or $0.74/share, in the year-earlier quarter, while revenues jumped 14% Y/Y and 8% Q/Q to nearly $9B, including an 18% Y/Y surge in international revenues to $7.29B in the quarter.
Results were helped by the acquisition of the Aker subsea equipment business, which accounted for 70% of the quarter's sequential revenue gain.
SLB (SLB) reported Q4 free cash flow of $2.28B, far above estimates for $1.2B, and said it plans to return more than $2.5B to shareholders this year, including a 10% dividend increase and more stock buybacks.
For FY 2024, SLB (SLB) forecasts international revenues rising at a mid-teens percentage rate, while North America is expected to grow in the mid single digits.
Shares of oilfield services rival Halliburton (HAL) +1.6% ahead of its earnings report next week.
On SLB's (SLB) post-earnings conference call, CEO Olivier Le Peuch said the company anticipates further growth in 2024 and sees the potential for more than $100B in global offshore final investment decisions in 2024-25 supporting a very favorable subsea outlook.
Le Peuch said the company expects to deliver more than $4B in additional subsea bookings in 2024, up more than 25% from the prior year, as the market continues to expand.
Looking to Q1, SLB (SLB) expects Y/Y revenue growth in the low teens and EBITDA growth in the mid-teens, followed by a typical seasonal activity bounce in Q2 and further acceleration of growth in the year's H2.
The war in Gaza and attacks by Houthi rebels on ships in the Red Sea have not affected SLB's (SLB) Middle East business, and "we do not anticipate a significant impact to activity in 2024, absent further escalation," Le Peuch said on the call.
Beyond 2025, SLB (SLB) foresees record investment levels in the Middle East, particularly from Saudi Arabia and the United Arab Emirates, as well as continued strong offshore activity in Brazil, Angola, Guyana and Norway.