Key Highlights
- First-quarter earnings declined 6% year-over-year to $752 million (50 cents per share) versus $797 million previously
- Geopolitical instability in the Middle East triggered widespread demobilization of company operations
- Quarterly revenue climbed 2.7% to $8.72 billion, surpassing Wall Street projections of $8.63 billion
- Adjusted earnings per share reached 52 cents, marginally exceeding the consensus forecast of 51 cents
- Adjusted EBITDA contracted 12% to $1.77 billion; management declined to provide annual guidance
Shares of SLB plunged 3.7% during Friday’s premarket session following the oilfield services giant’s first-quarter earnings report, which revealed declining profitability amid significant operational disruptions stemming from Middle East geopolitical tensions.
Chief Executive Olivier Le Peuch characterized the period as “a challenging start to the year,” noting that the company had no choice but to withdraw operations across multiple nations as clients prioritized the safety of their workforce and infrastructure.
Earnings dropped 6% from the prior-year quarter to $752 million, equivalent to 50 cents per diluted share. This marked a decline from the $797 million, or 58 cents per share, recorded during the same period in 2025.
When accounting for one-time items, adjusted earnings per share landed at 52 cents—narrowly beating the analyst consensus of 51 cents compiled by FactSet.
Quarterly revenue advanced 2.7% to $8.72 billion, outpacing Wall Street’s expectation of $8.63 billion. Despite the revenue upside, investor concerns centered on deteriorating profitability metrics.
Adjusted EBITDA tumbled 12% to $1.77 billion, emerging as a primary catalyst behind the sharp premarket selloff.
Domestic Strength Offsets International Weakness
Revenue from North American operations surged 26% to $2.17 billion, delivering a notable bright spot that partially counterbalanced challenges elsewhere.
Conversely, international revenue declined 3.8% to $6.47 billion—a direct consequence of Middle Eastern operational disruptions that affected SLB’s expansive global operations.
According to company statements, the well construction and reservoir performance segments absorbed the heaviest impact from the regional conflict.
SLB opted not to provide full-year financial projections. However, management confirmed its 2026 capital expenditure plan of $2.5 billion, representing a modest increase from the $2.4 billion deployed throughout 2025.
Executive Anticipates 2027 Market Recovery
Le Peuch observed that the ongoing conflict has “accelerated” the rebalancing dynamics between global liquid supply and demand while simultaneously highlighting critical weaknesses within the energy supply infrastructure.
He anticipates that nations will emphasize supply chain diversification and increase investments in developing domestic energy resources once regional stability returns.
The CEO also projected heightened investment activity in short-cycle initiatives throughout North America and Latin America, alongside expanded deepwater offshore exploration projects.
“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 stated.
Earlier in January, SLB had indicated that its regional challenges were largely resolved. Friday’s quarterly performance painted a contrasting picture.
Shares traded at $52.70 during premarket activity, retreating from Thursday’s closing price.
