Key Highlights
- First-quarter net income decreased 6% year-over-year to $752 million (50 cents per share) versus $797 million previously
- Ongoing Middle East tensions compelled operational demobilization across several regions
- Total revenue increased 2.7% to $8.72 billion, surpassing Wall Street’s $8.63 billion projection
- Adjusted earnings per share reached 52 cents, narrowly exceeding the 51-cent analyst consensus
- Adjusted EBITDA contracted 12% to $1.77 billion; company withheld full-year financial outlook
Shares of SLB tumbled 3.7% during Friday’s premarket session following the energy services provider’s disappointing first-quarter earnings report, with persistent Middle East instability significantly impacting operational performance.
Chief Executive Olivier Le Peuch characterized the period as “a challenging start to the year,” noting that the organization had been compelled to withdraw operations from multiple territories as clients prioritized safeguarding their workforce and infrastructure.
The company’s net income declined 6% from the prior year to $752 million, translating to 50 cents per share. This represents a drop from the $797 million, or 58 cents per share, recorded in the first quarter of 2025.
When adjusted for one-time items, earnings per share totaled 52 cents — marginally surpassing the Street’s 51-cent expectation, per FactSet data.
The company’s revenue climbed 2.7% to reach $8.72 billion, exceeding analyst projections of $8.63 billion. Despite beating revenue estimates, profitability concerns dominated investor sentiment.
Adjusted EBITDA plummeted 12% to $1.77 billion, emerging as the primary catalyst behind the premarket selloff.
Domestic Strength Can’t Offset International Weakness
Revenue from North American operations surged 26% to $2.17 billion, delivering a rare bright spot amid otherwise challenging conditions.
Conversely, international revenue declined 3.8% to $6.47 billion — a direct consequence of Middle East disruptions affecting SLB’s extensive global operations.
The company indicated that its well construction and reservoir performance segments bore the brunt of conflict-related headwinds.
SLB opted against providing full-year earnings guidance. Management did, however, confirm its capital expenditure plan of $2.5 billion for 2026, representing a modest increase from the $2.4 billion deployed in 2025.
Leadership Anticipates 2027 Market Rebound
Le Peuch observed that the regional conflict has “accelerated” the rebalancing of worldwide liquid fuel supply-demand dynamics while highlighting critical vulnerabilities within energy infrastructure.
He anticipates that nations will emphasize supply chain diversification and increase investment in domestic energy resources once hostilities subside.
The CEO also projected heightened investment activity in short-cycle North American and Latin American projects, alongside expanded deepwater offshore development initiatives.
“Absent a prolonged conflict leading to an economic slowdown and demand destruction, these supply responses reinforce our conviction of a broad-based recovery in upstream markets in 2027 and 2028,” he said.
Earlier this year in January, SLB had indicated that its regional challenges were subsiding. Friday’s quarterly results painted a markedly different picture.
Premarket trading showed the stock at $52.70, representing a decline from Thursday’s closing price.
