10-QPeriod: Q1 FY2024

SLB LIMITED/NV Quarterly Report for Q1 Ended Mar 31, 2024

Filed April 24, 2024For Securities:SLB

Summary

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 billion, 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.

Financial Highlights

46 data points
Beta

Revenue

$8.71B

Net Income

$1.07B

12.3% Net Margin

EPS (Diluted)

$0.74

Total Assets

$47.86B

Cash & Equivalents

$2.79B

Free Cash Flow

-$72.00M

Financial Statements
Beta
Revenue$8.71B
R&D Expenses$182.00M
Operating Income$1.65B
Interest Expense$113.00M
Net Income$1.07B
EPS (Basic)$0.75
EPS (Diluted)$0.74
Shares Outstanding (Basic)1.43B
Shares Outstanding (Diluted)1.45B

Key Highlights

  • 1Total revenue for Q1 2024 increased 13% year-over-year to $8.7 billion, with international revenue growing 18%.
  • 2Net income attributable to SLB rose 14% year-over-year to $1.07 billion ($0.74 per diluted share).
  • 3The company announced a definitive agreement to acquire ChampionX Corporation in an all-stock transaction, expected to close by the end of 2024.
  • 4SLB increased its quarterly cash dividend by 10% to $0.275 per share.
  • 5Capital expenditures remained stable year-over-year at $0.5 billion for the quarter, with a full-year target of $2.6 billion.
  • 6Free 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.
  • 7SLB 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.

Frequently Asked Questions

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.

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.

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.

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.