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SLB 8-K Report, Financial Results (Jul 19, 2024)

Reports
Earnings & Results·Regulation FD·Exhibits & Filings
Filing Date
Filed July 19, 2024
Period End
July 19, 2024
Security
SLB
In the record · 2016–202610-K1110-Q338-K144

SLB filed 11 annual reports (10-K), 33 quarterly reports (10-Q) and 144 current reports (8-K) between 2016 and 2026.

  1. Impairment8-K · Dec ’16Dec ’16
  2. Restructuring8-K · Jun ’20Jun ’20
  3. Leadership change8-K · Feb ’22Feb ’22
  4. Leadership change8-K · Oct ’26Oct ’26

01—Abstract

Summary

Summary of the 8-K filed July 19, 2024. Cited figures are marked; the original filing is the authoritative source.

SLB reported solid second-quarter 2024 results, with revenue of $9.14 billiona, up 5% sequentially and 13% year on year, driven by broad-based international growth.

GAAP diluted EPS was $0.77b (up 4% sequentially and 7% year on year), while EPS excluding charges and credits was $0.85 (up 13% sequentially and 18% year on year). Adjusted EBITDA reached $2.29 billion, with the margin expanding 142 bps sequentially to 25.0%. Management highlighted the highest quarterly international revenue since 2014, margin expansion across all Divisions, and strength in Production Systems, Reservoir Performance, and Digital.

Aker subsea acquisition contributions also boosted reported Production Systems growth; excluding the acquisition, global revenue grew 7% year on year. Cash generation was healthy, with cash flow from operations of $1.44 billionc and free cash flow of $776 million in the quarter. Net debt rose to $9.19 billion from $8.68 billion at March 31, 2024, reflecting $500 million each of 5.000% Senior Notes due 2027, 2029, and 2034 issued May 29, 2024, along with $465 million of buybacks in the quarter and $394 million in dividends.

Shareholder returns totaled $1.49 billiond in the first half, and management reiterated a $3.0 billion return target for 2024. The Board declared a quarterly dividend of $0.275 per share, payable October 10, 2024. Management expects continued momentum in international markets and digital sales in the second half, and reaffirmed its ambition to grow full-year adjusted EBITDA in the mid-teens.

Other events included the closing of the Aker Carbon Capture joint venture (SLB owns 80%) and the pending acquisition of ChampionX. Investors should note that reported results include charges and credits of $142 million pretax in the quarter, and that the filing contains forward-looking statements subject to material risks.

02—Key points

Key Highlights

  1. Revenue of $9.14 billion rose 5% sequentially and 13% year on year; international revenue of $7.45 billion grew 18% year on year, while North America declined 6%.
  2. GAAP diluted EPS was $0.77, while EPS excluding charges and credits was $0.85, up 13% sequentially and 18% year on year.
  3. Adjusted EBITDA of $2.29 billion grew 11% sequentially and 17% year on year, with margin expanding 142 bps sequentially to 25.0%.
  4. Cash flow from operations was $1.44 billion and free cash flow was $776 million; year-to-date free cash flow was $554 million.
  5. Net debt increased to $9.19 billion from $8.68 billion at March 31, 2024, after issuing $1.5 billion of senior notes on May 29, 2024.
  6. Digital & Integration revenue rose 10% sequentially to $1.05 billion with pretax margin of 31.0%, while Production Systems revenue grew 7% sequentially to $3.03 billion.
  7. Board approved a quarterly dividend of $0.275 per share; management targets $3.0 billion in total shareholder returns for 2024 and mid-teens full-year adjusted EBITDA growth.

03—Questions

Frequently Asked Questions

  1. How did SLB perform in the second quarter of 2024?

    SLB reported revenue of $9.14 billion, up 5% sequentially and 13% year on year. GAAP diluted EPS was $0.77, and EPS excluding charges and credits was $0.85. Adjusted EBITDA reached $2.29 billion, with a 25.0% margin.

  2. How much of the year-over-year growth came from the Aker subsea acquisition?

    The acquired Aker subsea business generated $485 million of revenue in Q2 2024. Excluding this contribution, global revenue grew 7% year on year rather than 13%, and Production Systems growth would have been 10% rather than 31%.

  3. What is SLB's capital return and debt position?

    SLB returned $1.49 billion to shareholders in the first half through buybacks and dividends and expects to return $3.0 billion in 2024. Net debt was $9.19 billion at June 30, 2024, up from $8.68 billion at March 31, 2024, following the issuance of $1.5 billion in senior notes.

  4. What is the full-year 2024 outlook?

    Management expects continued momentum in international markets and strong digital sales in the second half, along with cost efficiency programs, and targets full-year 2024 adjusted EBITDA growth in the mid-teens. Full-year 2024 capital investment is expected to be approximately $2.6 billion, flat with 2023.

  5. What charges affected reported results this quarter?

    Reported results included $142 million of pretax charges and credits in Q2 2024, mainly a $111 million cost-out program charge classified as restructuring and $31 million of merger and integration costs. These reduced GAAP EPS by $0.08 relative to EPS excluding charges and credits.

04—Continue

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