SLB - Schlumberger's Q1 earnings revenues top estimates but fall from Q4

2023-04-21 08:23:03 ET

Schlumberger ( NYSE: SLB ) -0.4% pre-market Friday after reporting Q1 adjusted earnings and revenue that topped expectations but cash flow from operations that was less than half the consensus estimate.

Q1 net income jumped to $934M, or $0.65/share, from $510M, or $0.36/share, in the year-earlier, adjusted EBITDA climbed to $1.79B from $1.25B a year ago, and revenues rose 30% Y/Y to $7.74B from $5.96B in the prior-year period.

But results were lower on a Q/Q basis, with net income down from $1.06B, or $0.74/share, adjusted EBITDA of $1.92B, and revenues of $7.88B.

Q1 North America revenues rose 32% Y/Y and 4% Q/Q to $1.7B, while International sales increased 29% Y/Y but fell 3% Q/Q to $5.98B, with revenue growth surpassing rig count growth both in North America and internationally, and representing the highest Y/Y quarterly growth in more than a decade.

Q1 revenues by division: Well construction up 36% Y/Y and 1% Q/Q to $3.26B, production systems up 38% Y/Y and flat Q/Q to $2.21B, reservoir performance up 24% Y/Y and down 3% Q/Q to $1.5B, and digital & integration up 4% Y/Y and down 12% Q/Q to $894M.

Q1 cash flow from operations increased to $330M from $131M a year earlier but came in well below the $710M FactSet consensus , but the company expects free cash flow generation will accelerate throughout the year, consistent with historical trends.

"The international and offshore markets continue to experience a strong resurgence of activity driven by resilient long-cycle development and capacity expansion projects," CEO Olivier Le Peuch said, but he expects the North American land market could result in an activity plateau in 2023 due to lower natural gas prices and capital restraint by private E&P operators.

Schlumberger's ( SLB ) stock price return has gained 1% YTD and 22% during the past year .

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