01—Abstract
Summary
Summary of the 10-Q filed April 24, 2024. Cited figures are marked; the original filing is the authoritative source.
SLB Limited/NV (SLB) reported strong first-quarter 2024 results, demonstrating significant year-over-year growth in revenue and net income.
Total revenue increased by 13% to $8.7 billiona, driven by a robust international performance, particularly in the Middle East & Asia and Europe & Africa, which offset a softer North American market. The company's core divisions—Reservoir Performance, Well Construction, and Production Systems—showed solid revenue growth and margin expansion, reflecting the benefits of long-cycle developments and increased production capacity investments. Net income attributable to SLB surged by 14% to $1.07 billion, or $0.74 per diluted share, compared to the prior year.
This performance was supported by effective cost management, with R&D and G&A expenses as a percentage of revenue remaining controlled. SLB also demonstrated a commitment to returning capital to shareholders, increasing its quarterly dividend and continuing its share repurchase program, while also announcing a significant acquisition. The company is well-positioned to capitalize on favorable industry fundamentals, particularly in international and offshore markets, and expects continued margin expansion throughout 2024.
02—Key points
Key Highlights
- Total revenue for Q1 2024 increased 13% year-over-year to $8.7 billion, with international revenue growing 18%.
- Net income attributable to SLB rose 14% year-over-year to $1.07 billion ($0.74 per diluted share).
- The company announced a definitive agreement to acquire ChampionX Corporation in an all-stock transaction, expected to close by the end of 2024.
- SLB increased its quarterly cash dividend by 10% to $0.275 per share.
- Capital expenditures remained stable year-over-year at $0.5 billion for the quarter, with a full-year target of $2.6 billion.
- Free cash flow for the quarter was negative at ($0.22 billion), primarily due to working capital changes, but the company is targeting increased capital returns to shareholders.
- SLB raised its 2024 target for total returns of capital to shareholders (dividends and share repurchases) to $3 billion, and set its 2025 target at $4 billion.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2024filed April 24, 2024Financial Statements
Q1 FY2024 against Q1 FY2023
| Line item | Q1 FY2024Q1 FY2023 | Change |
|---|---|---|
| Revenue | $8.71B$7.74B | +12.6% |
| R&D Expenses | $182.00M$174.00M | +4.6% |
| Operating Income | $1.65B$1.39B | +18.5% |
| Interest Expense | $113.00M$117.00M | −3.4% |
| Net Income | $1.07B$934.00M | +14.3% |
| EPS (Basic) | $0.75$0.65 | +15.4% |
| EPS (Diluted) | $0.74$0.65 | +13.8% |
| Shares Outstanding (Basic) | 1.43B1.43B | +0.4% |
| Shares Outstanding (Diluted) | 1.45B1.45B | +0.1% |
05—Questions
Frequently Asked Questions
How did SLB perform financially in the first quarter of 2024 compared to the first quarter of 2023?
SLB demonstrated strong performance in Q1 2024 compared to Q1 2023. Total revenue increased by 13% to $8.7 billion, driven by significant growth in international markets. Net income attributable to SLB rose by 14% to $1.07 billion, resulting in diluted earnings per share of $0.74, up from $0.65 in the prior year.
What are the key drivers of SLB's revenue growth in the first quarter?
The primary drivers of revenue growth were strong international activity, particularly in the Middle East & Asia and Europe & Africa regions, which grew by 29% and 18% year-over-year, respectively. The acquisition of the Aker subsea business in late 2023 also contributed to the growth, especially in the Production Systems segment.
What is the outlook for SLB's performance in the remainder of 2024?
SLB remains confident in its global revenue growth outlook for 2024. The company anticipates continued margin expansion throughout the year, driven by tight service and equipment capacity internationally, increased technology adoption, and operational efficiencies. A seasonal rebound in activity in the Northern Hemisphere and robust international activity are expected to drive sequential margin expansion in Q2 2024.
What is the significance of the announced acquisition of ChampionX?
The announced acquisition of ChampionX is a strategic move to further capture growth opportunities in production chemicals and artificial lift systems. ChampionX reported approximately $3.8 billion in revenue in 2023. The all-stock transaction, where ChampionX shareholders will own approximately 9% of SLB's outstanding shares upon closing, is expected to close before the end of 2024, subject to approvals.
06—Continue