10-QPeriod: Q3 FY2018

SLB LIMITED/NV Quarterly Report for Q3 Ended Sep 30, 2018

Filed October 24, 2018For Securities:SLB

Summary

SLB LIMITED/NV (SLB) reported a solid third quarter for 2018, demonstrating top-line growth and improved profitability compared to the prior year. Total revenue increased by 8% to $8.5 billion, driven by a significant 23% surge in North America revenue, largely due to increased hydraulic fracturing activity and market share gains. International revenue saw a modest 1% improvement, reflecting a complex global market. The company's proactive management of costs and operational efficiencies contributed to a healthy pretax operating income of $1.15 billion, up from $1.06 billion in the same period last year. For the nine-month period, revenue grew by 11% to $24.6 billion, with North America revenue up 37%. While segment performance varied, with Production and Drilling segments showing strong growth, Reservoir Characterization and Cameron segments experienced revenue declines. The company maintained a focus on capital discipline, with capital expenditures consistent year-over-year, and generated free cash flow of $1.06 billion for the nine months ended September 30, 2018. SLB's financial position remains robust, with a focus on returning value to shareholders through dividends and share repurchases.

Financial Highlights

48 data points
Beta

Revenue

$8.50B

Net Income

$644.00M

7.6% Net Margin

EPS (Diluted)

$0.46

Total Assets

$70.05B

Cash & Equivalents

$1.49B

Free Cash Flow

$1.26B

Financial Statements
Beta
Revenue$8.50B
R&D Expenses$177.00M
Operating Income$1.15B
Interest Expense$147.00M
Net Income$644.00M
EPS (Basic)$0.46
EPS (Diluted)$0.46
Shares Outstanding (Basic)1.39B
Shares Outstanding (Diluted)1.39B

Key Highlights

  • 1Total revenue for Q3 2018 reached $8.5 billion, an increase of 8% year-over-year, driven by strong North American performance.
  • 2North America revenue saw a substantial 23% year-over-year increase in Q3, attributed to increased hydraulic fracturing equipment deployment and market share gains.
  • 3International revenue grew by 1% in Q3, indicating a stabilizing but varied global market.
  • 4Pretax operating income for Q3 2018 was $1.15 billion, an increase from $1.06 billion in Q3 2017, reflecting improved operational performance.
  • 5For the first nine months of 2018, revenue increased by 11% to $24.6 billion, with North America revenue up 37%.
  • 6Free cash flow for the nine months ended September 30, 2018, was $1.06 billion.
  • 7The company continued its commitment to shareholder returns, paying dividends and executing share repurchases under its ongoing program.

Frequently Asked Questions

The primary driver of SLB's revenue growth in Q3 2018 was the strong performance in North America, which saw a 23% increase year-over-year. This was largely due to the deployment of additional hydraulic fracturing equipment and market share gains in the region.

While North America experienced significant growth, international revenue saw a more modest increase of 1% in Q3 2018. This indicates a more challenging or stable international market compared to the robust North American activity.

For the nine months ended September 30, 2018, SLB generated $1.06 billion in free cash flow. The company's net debt was $14.52 billion as of September 30, 2018. SLB has indicated that its cash and short-term investments, along with available credit facilities, are sufficient to meet future business requirements for at least the next 12 months.

In the second quarter of 2018, SLB recorded a $184 million pretax charge ($164 million after-tax) for headcount reductions. There were no significant charges or credits recorded in the first or third quarters of 2018. In contrast, the first nine months of 2017 included several charges related to merger integration and a promissory note fair value adjustment, totaling $723 million.