How did SLB perform in the third quarter of 2024 compared with the prior year?

Revenue rose 10% year over year to $9.16 billion, and GAAP diluted EPS increased 6% to $0.83. Excluding charges and credits, EPS grew 14% to $0.89. Growth was helped by the Aker subsea acquisition, which contributed $532 million of revenue. Excluding that acquisition, global revenue still rose about 4% year over year.

What is the status of SLB's shareholder return program?

SLB returned close to $900 million to shareholders in Q3 through buybacks and dividends, bringing nine-month returns to $2.38 billion. Because of strong cash flow and attractive share prices, the company accelerated repurchases and now expects to exceed its $3.0 billion full-year return commitment. The board declared a $0.275 quarterly dividend payable January 9, 2025.

What are the main risks to SLB's near-term outlook?

Management pointed to softer short-cycle activity, international customers trimming near-term capex because of lower oil prices and ample supply, and weak U.S. land drilling. Well Construction revenue fell 3% sequentially and Latin America declined 3%. Management still expects sustained long-term upstream investment, supported by its exposure to deepwater, gas, and long-cycle international projects.

Did SLB change its full-year 2024 guidance?

SLB reiterated its full-year adjusted EBITDA margin target of at or above 25% and expects to keep full-year 2024 capital investment at about $2.60 billion, the same as 2023. It also said it expects strong cash flow. The release did not change the outlook in a material way beyond the expanded shareholder return expectation.

Is SLB's balance sheet getting stronger?

Yes. Net debt declined to $8.46 billion at September 30, 2024, from $9.19 billion at June 30, 2024 and $7.98 billion at December 31, 2023 in the same measure. Cash and short-term investments rose to $4.46 billion. Long-term debt increased year to date to $11.86 billion, partly reflecting financing activity.

SLB 8-K: Earnings & Results & Regulation FD

01—Abstract

Summary

Summary of the 8-K filed October 18, 2024. Cited figures are marked; the original filing is the authoritative source.

SLB reported third-quarter 2024 results that showed steady sequential revenue and solid year-over-year growth, with margin expansion and strong cash generation.

Revenue was $9.16 billion^a, flat sequentially and up 10% year over year, while GAAP diluted EPS of $0.83 rose 8% sequentially and 6% year over year. Excluding charges and credits, EPS was $0.89, up 5% sequentially and 14% year over year. Adjusted EBITDA reached $2.34 billion with a 25.6% margin, a 55 basis point sequential improvement, and management reiterated a full-year adjusted EBITDA margin at or above 25%.

Growth was supported by the Aker subsea acquisition, which contributed $532 million^b of revenue, and by Digital & Integration, where pretax margin expanded 456 basis points sequentially to 35.5%. Cash generation was strong, with operating cash flow of $2.45 billion and free cash flow of $1.81 billion. Management returned close to $900 million to shareholders in the quarter and said it now expects to exceed its $3.0 billion full-year shareholder return commitment after accelerating buybacks.

The board also approved a quarterly dividend of $0.275^c per share. Net debt improved to $8.46 billion from $9.19 billion at the end of the second quarter. The outlook is more cautious.

Management noted softer short-cycle activity, cautious international spending tied to lower oil prices, and subdued U.S. land activity. Well Construction revenue fell 3%^d sequentially, and Latin America declined 3%.

Management still expects sustained upstream investment over the longer term, citing long-cycle international, deepwater, and gas projects as key support. Full-year 2024 capital investment is still expected to be about $2.60 billion.

02—Key points

Key Highlights

Revenue of $9.16 billion was flat sequentially and up 10% year over year, with Aker subsea acquisition contributing $532 million.
GAAP diluted EPS of $0.83 rose 8% sequentially; EPS excluding charges and credits of $0.89 rose 14% year over year.
Adjusted EBITDA of $2.34 billion with a 25.6% margin, up 55 basis points sequentially, supporting the full-year 25%+ margin goal.
Free cash flow of $1.81 billion on $2.45 billion operating cash flow; net debt fell to $8.46 billion from $9.19 billion in Q2.
Shareholder returns accelerated: nearly $900 million returned in Q3 and the company now expects to exceed its $3.0 billion annual commitment; quarterly dividend of $0.275 declared.
Digital & Integration pretax margin expanded 456 bps sequentially to 35.5%, driven by digital products, while Well Construction revenue declined 3%.
Management flagged softer short-cycle activity, cautious international spending due to lower oil prices, and subdued U.S. land activity as near-term headwinds.

03—Questions

Frequently Asked Questions

How did SLB perform in the third quarter of 2024 compared with the prior year?
Revenue rose 10% year over year to $9.16 billion, and GAAP diluted EPS increased 6% to $0.83. Excluding charges and credits, EPS grew 14% to $0.89. Growth was helped by the Aker subsea acquisition, which contributed $532 million of revenue. Excluding that acquisition, global revenue still rose about 4% year over year.
What is the status of SLB's shareholder return program?
SLB returned close to $900 million to shareholders in Q3 through buybacks and dividends, bringing nine-month returns to $2.38 billion. Because of strong cash flow and attractive share prices, the company accelerated repurchases and now expects to exceed its $3.0 billion full-year return commitment. The board declared a $0.275 quarterly dividend payable January 9, 2025.
What are the main risks to SLB's near-term outlook?
Management pointed to softer short-cycle activity, international customers trimming near-term capex because of lower oil prices and ample supply, and weak U.S. land drilling. Well Construction revenue fell 3% sequentially and Latin America declined 3%. Management still expects sustained long-term upstream investment, supported by its exposure to deepwater, gas, and long-cycle international projects.
Did SLB change its full-year 2024 guidance?
SLB reiterated its full-year adjusted EBITDA margin target of at or above 25% and expects to keep full-year 2024 capital investment at about $2.60 billion, the same as 2023. It also said it expects strong cash flow. The release did not change the outlook in a material way beyond the expanded shareholder return expectation.
Is SLB's balance sheet getting stronger?
Yes. Net debt declined to $8.46 billion at September 30, 2024, from $9.19 billion at June 30, 2024 and $7.98 billion at December 31, 2023 in the same measure. Cash and short-term investments rose to $4.46 billion. Long-term debt increased year to date to $11.86 billion, partly reflecting financing activity.

04—Continue

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