SLB Announces Third-Quarter 2024 Results
-
Revenue of
$9.16 billion was steady sequentially and increased 10% year on year -
GAAP EPS of
$0.83 increased 8% sequentially and 6% year on year -
EPS, excluding charges and credits, of
$0.89 increased 5% sequentially and 14% year on year -
Net income attributable to SLB of
$1.19 billion increased 7% sequentially and 6% year on year -
Adjusted EBITDA of
$2.34 billion increased 2% sequentially and 13% year on year -
Cash flow from operations was
$2.45 billion and free cash flow was$1.81 billion -
Board approved quarterly cash dividend of
$0.275 per share
This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20241016795721/en/
The exterior of the SLB headquarters in
Third-Quarter Results
(Stated in millions, except per share amounts) | |||||||||
Three Months Ended | Change | ||||||||
2024 |
2024 |
2023 |
Sequential | Year-on-year | |||||
Revenue |
|
|
|
- |
10% |
||||
Income before taxes - GAAP basis |
|
|
|
6% |
8% |
||||
Income before taxes margin - GAAP basis |
16.5% |
15.5% |
16.8% |
91 bps |
-33 bps |
||||
Net income attributable to SLB - GAAP basis |
|
|
|
7% |
6% |
||||
Diluted EPS - GAAP basis |
|
|
|
8% |
6% |
||||
|
|
||||||||
Adjusted EBITDA* |
|
|
|
2% |
13% |
||||
Adjusted EBITDA margin* |
25.6% |
25.0% |
25.0% |
55 bps |
54 bps |
||||
Pretax segment operating income* |
|
|
|
3% |
13% |
||||
Pretax segment operating margin* |
20.8% |
20.3% |
20.3% |
48 bps |
51 bps |
||||
Net income attributable to SLB, excluding charges & credits* |
|
|
|
4% |
13% |
||||
Diluted EPS, excluding charges & credits* |
|
|
|
5% |
14% |
||||
Revenue by Geography | |||||||||
International |
|
|
|
- |
12% |
||||
|
1,687 |
1,644 |
1,643 |
3% |
3% |
||||
Other |
47 |
43 |
53 |
n/m |
n/m |
||||
|
|
|
- |
10% |
(Stated in millions) | |||||||||
Three Months Ended | Change | ||||||||
2024 |
2024 |
2023 |
Sequential | Year-on-year | |||||
Revenue by Division | |||||||||
Digital & Integration |
|
|
|
4% |
|
11% |
|||
Reservoir Performance |
1,823 |
1,819 |
1,680 |
- |
|
9% |
|||
|
3,312 |
3,411 |
3,430 |
-3% |
|
-3% |
|||
Production Systems |
3,103 |
3,025 |
2,367 |
3% |
|
31% |
|||
Other |
(167) |
(166) |
(149) |
n/m |
n/m |
||||
|
|
|
- |
|
10% |
||||
Pretax Operating Income by Division |
|
|
|
||||||
Digital & Integration |
|
|
|
19% |
|
23% |
|||
Reservoir Performance |
367 |
376 |
344 |
-2% |
|
7% |
|||
|
714 |
742 |
759 |
-4% |
|
-6% |
|||
Production Systems |
519 |
473 |
319 |
10% |
|
63% |
|||
Other |
(84) |
(62) |
(53) |
n/m |
|
n/m |
|||
|
|
|
3% |
13% |
|||||
|
|
|
|||||||
Pretax Operating Margin by Division |
|
|
|
||||||
Digital & Integration |
35.5% |
31.0% |
32.0% |
456 bps |
|
353 bps |
|||
Reservoir Performance |
20.1% |
20.6% |
20.5% |
-53 bps |
|
-37 bps |
|||
|
21.5% |
21.7% |
22.1% |
-19 bps |
|
-58 bps |
|||
Production Systems |
16.7% |
15.6% |
13.5% |
110 bps |
|
325 bps |
|||
Other |
n/m |
n/m |
n/m |
n/m |
|
n/m |
|||
20.8% |
20.3% |
20.3% |
48 bps |
|
51 bps |
||||
SLB acquired the Aker subsea business during the fourth quarter of 2023 in connection with the formation of the OneSubsea joint venture. The acquired business generated revenue of |
|||||||||
*These are non-GAAP financial measures. See sections titled "Divisions" and Supplementary Information" for details. | |||||||||
n/m = not meaningful |
SLB Expands Margins and Earnings, Despite Cautious Macro Environment
“SLB delivered strong third-quarter results, achieving earnings growth and margin expansion in line with our full-year adjusted EBITDA margin goal of 25% or higher,” said SLB Chief Executive Officer
“This performance was achieved despite an environment where short-cycle activity growth softened, and some international producers exercised cautious spending triggered by lower oil prices and ample global supply, while land activity in the
Digital Leads Results as Customers Focus on Cloud Computing and Automation
“As we continue to see the transformative impact of digital technology across the industry, we delivered a 4% sequential increase in Digital & Integration revenue. This was driven by our digital business, which grew 7% sequentially and 25% year on year. Digital & Integration pretax segment operating margin expanded by 456 basis points (bps) sequentially, mostly driven by our digital business.
“Our customers are increasingly embracing digital technology to shorten planning cycle times, boost automation, and extract efficiency. Our cloud-based platform offerings have emerged as integral tools for unlocking data and AI across the energy value chain, enabling data-driven decision-making and streamlined operations. Our leadership in this area was on full display as we welcomed more than 1,000 customers and partners to the
“At the event, we announced exciting new collaborations and partnerships with NVIDIA,
“In the Core Divisions—comprising Reservoir Performance,
With Strong Cash Flow, SLB Accelerates Returns to Shareholders
“Overall, in the third quarter, we achieved an adjusted EBITDA margin of 25.6%, a 55-bps sequential increase. Cash flow from operations was
“With strong cash flows and visibility into continued strong cash flow generation, we have accelerated our share repurchase program, taking advantage of current share price levels. We now expect to exceed the
“I would like to thank the SLB team for their unwavering dedication and outstanding execution, consistently delivering for both our customers and shareholders,” Le Peuch said.
International, Digital, and Cost Optimization to Remain the Focus
“Although some customers have adopted a more cautious approach to their near-term capital expenditures and discretionary spending amid lower commodity prices, most projects are progressing as planned. Recent geopolitical events have further highlighted the importance of long-term energy security and reducing potential supply disruptions.
“SLB is well positioned to navigate the evolving market conditions by leveraging its unique exposure to long-cycle projects in international, deepwater, and gas markets. Additionally, SLB’s digital leadership and growing presence in emerging low-carbon markets—such as carbon capture and storage and geothermal—are supporting a more balanced portfolio.
“Although the rate of upstream spending growth has moderated in the last few months due to the macroenvironment, we continue to expect a sustained level of upstream investment in the years to come. In this context, we anticipate delivering strong cash flows and a full-year adjusted EBITDA margin at or above 25%, supported by our international leadership, robust digital sales, and ongoing cost optimization initiatives.
“Overall, our business remains well positioned to deliver further margin expansion and increased returns to shareholders,” Le Peuch said.
Other Events
During the quarter, SLB repurchased 11.3 million shares of its common stock for a total purchase price of
On
On
Third-Quarter Revenue by Geographical Area
(Stated in millions) | |||||||||
Three Months Ended | Change | ||||||||
2024 |
2024 |
2023 |
Sequential | Year-on-year | |||||
|
|
|
|
3% |
|
3% |
|||
|
1,689 |
1,742 |
1,681 |
-3% |
|
- |
|||
|
2,434 |
2,442 |
2,091 |
- |
|
16% |
|||
|
3,302 |
3,268 |
2,842 |
1% |
|
16% |
|||
Eliminations & other |
47 |
43 |
53 |
n/m |
|
n/m |
|||
|
|
|
- |
|
10% |
||||
|
|
|
|||||||
International |
|
|
|
- |
|
12% |
|||
|
|
|
|
3% |
|
3% |
|||
SLB acquired the Aker subsea business during the fourth quarter of 2023 in connection with the formation of the OneSubsea joint venture. The acquired business generated revenue of |
|||||||||
*Includes Russia and the |
|||||||||
n/m = not meaningful |
International
Revenue in
Revenue in the
Third-Quarter Results by Division
Digital & Integration
(Stated in millions) | |||||||||
Three Months Ended | Change | ||||||||
2024 |
2024 |
2023 |
Sequential | Year-on-year | |||||
Revenue | |||||||||
International |
|
|
|
10% |
|
13% |
|||
|
258 |
291 |
242 |
-11% |
|
6% |
|||
Other |
- |
2 |
3 |
n/m |
|
n/m |
|||
|
|
|
4% |
|
11% |
||||
|
|
|
|||||||
Pretax operating income |
|
|
|
19% |
|
23% |
|||
Pretax operating margin |
35.5% |
31.0% |
32.0% |
456 bps |
|
353 bps |
|||
n/m = not meaningful |
Digital & Integration revenue of
Digital & Integration pretax operating margin of 36% expanded 456 bps sequentially, mostly due to improved profitability in digital, following higher uptake of digital products and solutions and cost efficiencies. Year on year, pretax operating margin expanded 353 bps due to increased profitability in digital, partially offset by lower profitability in APS from the effects of higher amortization expense and lower gas prices.
Reservoir Performance
(Stated in millions) | |||||||||
Three Months Ended | Change | ||||||||
2024 |
2024 |
2023 |
Sequential | Year-on-year | |||||
Revenue | |||||||||
International |
|
|
|
- |
|
8% |
|||
|
145 |
134 |
125 |
8% |
|
16% |
|||
Other |
2 |
1 |
1 |
n/m |
|
n/m |
|||
|
|
|
- |
|
9% |
||||
|
|
|
|||||||
Pretax operating income |
|
|
|
-2% |
|
7% |
|||
Pretax operating margin |
20.1% |
20.6% |
20.5% |
-53 bps |
-37 bps |
||||
n/m = not meaningful |
Reservoir Performance revenue of
Reservoir Performance pretax operating margin of 20% contracted 53 bps sequentially due to lower profitability in evaluation, partially offset by improved profitability in intervention. Year on year, pretax operating margin contracted 37 bps due to an unfavorable technology mix.
(Stated in millions) | |||||||||
Three Months Ended | Change | ||||||||
2024 |
2024 |
2023 |
Sequential | Year-on-year | |||||
Revenue | |||||||||
International |
|
|
|
-3% |
|
-1% |
|||
|
581 |
592 |
663 |
-2% |
|
-12% |
|||
Other |
56 |
51 |
60 |
n/m |
|
n/m |
|||
|
|
|
-3% |
|
-3% |
||||
|
|
|
|||||||
Pretax operating income |
|
|
|
-4% |
|
-6% |
|||
Pretax operating margin |
21.5% |
21.7% |
22.1% |
-19 bps | -58 bps | ||||
n/m = not meaningful |
Production Systems
(Stated in millions) | |||||||||
Three Months Ended | Change | ||||||||
2024 |
2024 |
2023 |
Sequential | Year-on-year | |||||
Revenue | |||||||||
International |
|
|
|
- |
|
36% |
|||
|
723 |
640 |
626 |
13% |
|
15% |
|||
Other |
7 |
7 |
1 |
n/m |
|
n/m |
|||
|
|
|
3% |
|
31% |
||||
|
|
|
|||||||
Pretax operating income |
|
|
|
10% |
|
63% |
|||
Pretax operating margin |
16.7% |
15.6% |
13.5% |
110 bps | 325 bps | ||||
SLB acquired the Aker subsea business during the fourth quarter of 2023 in connection with the formation of the OneSubsea joint venture. The acquired business generated revenue of |
|||||||||
n/m = not meaningful |
Production Systems revenue of
Production Systems pretax operating margin of 17% expanded 110 bps sequentially with improved profitability in surface production systems, completions, and artificial lift. Year on year, pretax operating margin expanded 325 bps due to improved profitability in surface production systems, artificial lift, and valves.
Quarterly Highlights
CORE
Contract Awards
SLB continues to win new contract awards that align with SLB’s strengths in the Core, particularly in the international and offshore basins. Notable highlights include the following:
-
In the
UAE , SLB, ADNOC Drilling Company, and Patterson-UTI announced the formation of the Turnwell Industries LLC OPC joint venture (JV). The JV will focus on the acceleration of UAE’s unconventional oil and gas program, with an initial 144 wells scheduled for completion by the end of 2025. SLB will provide integrated drilling, stimulation, and completion services, as well as project management, digital capabilities, and subsurface support. -
In
Kuwait ,Kuwait Oil Company (KOC) has awarded SLB a lump sum turnkey (LSTK) drilling contract to drill and deliver wells in south and eastKuwait . SLB will manage the planning, construction, and drilling of 141 wells over a period of three years. This LSTK contract will enable improved efficiency and faster deployment of technologies. -
In
Oman ,Shell Development Oman LLC has awarded SLB a two-year integrated well construction contract covering up to 23 wells in Block 10 and Block 11 with the potential to extend an additional three years. SLB will provide bits and drilling tools, cementing, drilling fluids, drilling services, and mud logging. -
In the
North Sea , bp awarded SLB OneSubsea™ and Subsea7 an integrated engineering, procurement, construction, and installation contract for the Murlach development (formerly Skua Field), 240 kilometers east ofAberdeen in theU.K. North Sea . The Murlach project will include the first-ever implementation of SLB OneSubsea standard, configurable vertical monobore tree systems in theU.K. North Sea , which will be deployed by Subsea7 via vessel to reduce rig days. -
In
Brazil , Petrobras awarded SLB OneSubsea a major contract for two ultradeepwater projects. The contract covers standardized presalt subsea production systems and services to develop the Atapu and Sepia oil fields in theSantos Basin . SLB OneSubsea will supply Petrobras-standard configured presalt vertical trees, subsea distribution units, control systems, and pipeline systems, along with related installation, commissioning, and life-of-field services. These projects will add to Petrobras' presalt investments and enable Petrobras to add two new FPSO platforms, each with a daily capacity of 225,000 barrels of oil and 10 million cubic meters of gas. -
Also in
Brazil , Equinor awarded SLB a contract for the deepwater development of theRaia Project with first oil expected in 2028. SLB will provide directional drilling services, fluids, cementing, and logging and completion tools for six wells. The area contains a recoverable volume of natural gas and oil condensate of more than 1 billion barrels of oil equivalent. -
Also in
Brazil , Petrobras awarded SLB a 10-year contract for the delivery of encapsulated submersible pump services for up to 200 systems inBahia state. This performance-based contract underscores the reliability and excellence of SLB equipment and services. -
Offshore
Norway , Equinor awarded SLB a multiyear integrated drilling and reservoir evaluation contract spanning a wide range of operations. This includes integrated drilling and wireline services for an exploration drilling campaign on the Norwegian continental shelf; IriSphere™ look-ahead-while-drilling service for Stage II of the Troll Phase 3 project; wireline services for an exploration drilling campaign in theBarents Sea ; and drilling and wireline services in the Irpa subsea development to create a tieback that extends the lifespan of Aasta Hansteen Field. Work for this integrated-domain contract will begin in 2025. -
In
Namibia , an operator awarded SLB a three-year integrated contract for well construction and reservoir characterization services. This contract includes the utilization of the SLB Ora™ intelligent wireline formation testing platform.
Technology and Innovation
Notable technology introductions and deployment in the quarter include the following:
-
In the
U.S. , ExxonMobil and SLB collaborated on the longest well section in thePermian Basin , delivering the first-ever four-mile well in the Second Bone Spring formation. Utilizing SLB’s PowerDrive Orbit G2™ rotary steerable system with a ruggedized pad design, the single-run lateral was achieved by steering at a complex high angle in harsh downhole conditions. This approach also led to a significant reduction in drilling time, releasing the well in 16.4 days. -
In
Kuwait , SLB and KOC implemented an advanced well intervention workflow, integrating distributed temperature sensing, 3D far-field sonic service, and production logging tools. Deploying ACTive™ real-time downhole coiled tubing services, SLB provided detailed reservoir insights and enabled the precise deployment of engineered stimulation fluids. This intervention identified a critical thief zone, mapped the surrounding microfractures, and improved water intake patterns, ultimately resulting in an increase of 200 barrels of oil per day from four nearby wells. One previously shut-in well achieved 1,800 barrels of oil per day postintervention. Based on this success, KOC has approved the expansion of this workflow across the Sabriyah Mauddud flank, with four additional wells slated for similar interventions. -
In
Angola , SLB and TotalEnergies deployed the first offshore application of OneSTEP EF™ efficient, low-risk sandstone stimulation solution in the Canela Field. The candidate well, situated in a sandstone reservoir, faced multiple damage mechanisms, including mudcake, lost circulation material, organic deposits, silt, clay, and fines migration. After deploying the solution, the well's flow rate increased by 250% and has become TotalEnergies' top producing well inAngola .
Decarbonization
SLB is focused on developing and implementing technologies that can reduce emissions and environmental impact with practical, quantifiably proven solutions. Highlights include the following:
-
In the
U.S. , SLB OneSubsea has signed a memorandum of understanding withC-Power to explore the use of converted energy from ocean waves as a lower-cost, lower-carbon power source for subsea energy applications. The joint industry project, cosponsored by theU.S. Department of Energy , will be conducted by SLB OneSubsea in collaboration with itsIntegration Alliance partner, Subsea7. -
In
Norway , SLB and Equinor successfully deployed the world’s first offshore electric-powered light-string coiled tubing package. This innovative package was designed together with Equinor to bridge the gap between conventional offshore wireline and coiled tubing capabilities. When compared with the traditional coiled tubing package, the light-string package requires 48% less rig floor footprint, 33% fewer personnel on board, and up to 75% less rig-up and rig-down time. In its first job, the light-string coiled tubing package performed a downhole cleanout operation 75% faster than would have been possible with conventional wireline.
DIGITAL
SLB is deploying digital technology at scale, partnering with customers to migrate their technology and workflows into the cloud, to embrace new AI-enabled capabilities, and to leverage insights to elevate their performance. Notable highlights include the following:
-
SLB launched the Lumi data and AI platform, which integrates advanced AI capabilities—including generative AI—with workflows across the energy value chain. The open, secure, and modular platform unlocks access to high-quality data across subsurface, surface, planning, and operations, increasing cross-domain collaboration and releasing new intelligence and insights to improve the quality and speed of decision-making at the enterprise level.
-
SLB and NVIDIA announced that they will build on their long-standing collaboration to develop generative AI solutions for the energy industry. Working together, the companies will build and optimize models to the specific needs and requirements of the data-intensive energy industry, including subsurface exploration, production operations, and data management. The collaboration accelerates the development and deployment of industry-specific generative AI models across SLB’s global platforms, including its Delfi™ digital platform and Lumi data and AI platform.
-
SLB and
Amazon Web Services (AWS) announced an extended partnership to expand access to applications from the Delfi digital platform. Energy Data Insights from AWS will also offer compatibility with SLB’s new Lumi data and AI platform. SLB and Amazon have also entered into a multiyear strategic framework agreement to explore the deployment of low-carbon technologies. -
SLB and Palo Alto Networks announced an expanded collaboration to strengthen cybersecurity for the energy sector. The companies will combine SLB’s cloud and edge technologies and domain expertise in the energy industry with Palo Alto Networks’ cross-industry, platform-based cybersecurity solutions. This will not only help SLB remain on the forefront with its own security infrastructure but will also help drive future enhanced solutions to address evolving cyber threats as the industry’s adoption of digital solutions and artificial intelligence accelerates.
-
SLB and
Aramco have signed an agreement with the aim of codeveloping, commercializing, and utilizing digital solutions to help mitigate greenhouse gas emissions in industrial sectors. The agreement establishes a framework for the development of several digital solutions on SLB’s digital sustainability platform that will enable industrial companies to accelerate their progress toward net zero by more easily measuring, reporting, and verifying their emissions. -
In
Australia , Woodside Energy has awarded SLB a three-year digital frame agreement, which incorporates global subsurface data management, software provisioning, Delfi on-demand reservoir simulation, and onsite support services. SLB will help Woodside Energy to standardize an enterprise-scale data management solution, while also providing a full suite of software products and compute scalability via the Delfi platform for reservoir simulations.
NEW ENERGY
SLB continues to participate in the global transition to low-carbon energy systems through innovative technology and strategic partnerships, including the following:
-
In
Nevada , SLB achieved breakthrough results in sustainable lithium production. Using a proprietary integrated solution that combines SLB’s subsurface expertise with surface engineering of advanced technologies that include direct lithium extraction (DLE), SLB was able to produce lithium at a rate 500 times faster than conventional methods while using only 10% of the land. The plant reached a verified recovery rate of 96% lithium from brine while using significantly less water, energy, and fewer chemical reagents in comparison with other lithium mining techniques. -
In the
U.S. , SLB Capturi™, the newly formed joint venture between SLB and Aker Carbon Capture, was awarded a contract by CO280 Solutions for front end engineering and design (FEED) of a large-scale carbon capture plant at a pulp and paper mill on theU.S. Gulf Coast . The project, which aims to remove 800,000 metric tons of carbon emissions annually, will also deliver permanent, verifiable, and affordable carbon dioxide removals (CDRs). This follows recent announcements by SLB Capturi and CO280 on their collaboration to develop large-scale CDR projects in theU.S. andCanada pulp and paper industries and their collaboration with Microsoft® to scale the full value chain of carbon removal. -
Also in the
U.S. , SLB Capturi has secured funding from theU.S. Department of Energy’sOffice of Clean Energy Demonstrations for the first phase of two carbon capture projects. These projects, which commenced inAugust 2024 with a FEED study, involve deploying carbon capture systems at Basin Electric’sDry Fork Station inWyoming and International Paper’sVicksburg Containerboard Mill inMississippi . The projects are undertaken in partnership withTDA Research for theWyoming project and withRTI International , International Paper, and Amazon, for theMississippi project. The combined aim of these projects is to capture 278,000 metric tons of CO2 annually, demonstrating the potential of early-stage carbon capture technologies for achieving significant emissions reductions. -
In
Norway , SLB launched a well integrity assessment solution that simplifies carbon storage site selection and evaluation by quantifying well integrity risks in mature or retired oil and gas fields. SLB's solution incorporates advanced failure mode, effects, and criticality analysis to assess potential leakage pathways, well barriers, failure mechanisms, and resulting consequences; helping customers understand the risks associated with each well, inform remediation strategies, and, ultimately, estimate project viability.
FINANCIAL TABLES
Condensed Consolidated Statement of Income
(Stated in millions, except per share amounts) |
|||||||
Third Quarter | Nine Months | ||||||
Periods Ended |
2024 |
2023 |
2024 |
2023 |
|||
Revenue |
|
|
|
|
|||
Interest & other income (1) |
96 |
73 |
265 |
247 |
|||
Expenses | |||||||
Cost of revenue (1) |
7,237 |
6,592 |
21,506 |
19,378 |
|||
Research & engineering |
187 |
186 |
557 |
524 |
|||
General & administrative |
90 |
81 |
305 |
268 |
|||
Merger & integration (1) |
33 |
- |
60 |
- |
|||
Restructuring (1) |
65 |
- |
176 |
- |
|||
Interest |
136 |
129 |
381 |
373 |
|||
Income before taxes (1) |
|
|
|
|
|||
Tax expense (1) |
289 |
259 |
824 |
722 |
|||
Net income (1) |
|
|
|
|
|||
Net income attributable to noncontrolling interests (1) |
32 |
13 |
95 |
36 |
|||
Net income attributable to SLB (1) |
|
|
|
|
|||
Diluted earnings per share of SLB (1) |
|
|
|
|
|||
Average shares outstanding |
1,417 |
1,424 |
1,425 |
1,424 |
|||
Average shares outstanding assuming dilution |
1,432 |
1,442 |
1,441 |
1,442 |
|||
Depreciation & amortization included in expenses (2) |
|
|
|
|
(1) |
See section entitled “Charges & Credits” for details. |
(2) |
Includes depreciation of fixed assets and amortization of intangible assets, exploration data costs, and APS investments. |
Condensed Consolidated Balance Sheet
(Stated in millions) |
|||
|
|
||
Assets |
2024 |
2023 |
|
Current Assets | |||
Cash and short-term investments |
|
|
|
Receivables |
8,260 |
7,812 |
|
Inventories |
4,573 |
4,387 |
|
Other current assets |
1,506 |
1,530 |
|
18,801 |
17,718 |
||
Investment in affiliated companies |
1,744 |
1,624 |
|
Fixed assets |
7,360 |
7,240 |
|
|
14,559 |
14,084 |
|
Intangible assets |
3,122 |
3,239 |
|
Other assets |
4,189 |
4,052 |
|
|
|
||
Liabilities and Equity | |||
Current Liabilities | |||
Accounts payable and accrued liabilities |
|
|
|
Estimated liability for taxes on income |
888 |
994 |
|
Short-term borrowings and current portion of long-term debt |
1,059 |
1,123 |
|
Dividends payable |
406 |
374 |
|
12,699 |
13,395 |
||
Long-term debt |
11,864 |
10,842 |
|
Other liabilities |
2,484 |
2,361 |
|
27,047 |
26,598 |
||
Equity |
22,728 |
21,359 |
|
|
|
Liquidity
(Stated in millions) |
|||||||
Components of Liquidity |
2024 |
|
2024 |
|
2023 |
|
2023 |
Cash and short-term investments |
|
|
|
|
|||
Short-term borrowings and current portion of long-term debt |
(1,059) |
(1,033) |
(1,998) |
(1,123) |
|||
Long-term debt |
(11,864) |
(12,156) |
(11,147) |
(10,842) |
|||
Net Debt (1) |
|
|
|
|
|||
Details of changes in liquidity follow: | |||||||
Nine |
|
Third |
|
Nine |
|||
Months |
|
Quarter |
|
Months |
|||
Periods Ended |
2024 |
|
2024 |
|
2023 |
||
Net income |
|
|
|
||||
Charges and credits, net of tax (2) |
231 |
92 |
(28) |
||||
3,692 |
1,310 |
3,099 |
|||||
Depreciation and amortization (3) |
1,871 |
640 |
1,703 |
||||
Stock-based compensation expense |
244 |
71 |
218 |
||||
Change in working capital |
(1,731) |
313 |
(1,353) |
||||
Other |
136 |
115 |
(52) |
||||
Cash flow from operations |
4,212 |
2,449 |
3,615 |
||||
Capital expenditures |
(1,322) |
(460) |
(1,345) |
||||
APS investments |
(390) |
(134) |
(391) |
||||
Exploration data capitalized |
(141) |
(50) |
(121) |
||||
Free cash flow (4) |
2,359 |
1,805 |
1,758 |
||||
Dividends paid |
(1,144) |
(393) |
(961) |
||||
Stock repurchase program |
(1,236) |
(501) |
(594) |
||||
Proceeds from employee stock plans |
244 |
124 |
276 |
||||
Business acquisitions and investments, net of cash acquired |
(552) |
(47) |
(280) |
||||
Purchases of Blue |
(136) |
(60) |
(169) |
||||
Proceeds from sale of Blue |
92 |
41 |
91 |
||||
Proceeds from sale of Liberty shares |
- |
- |
137 |
||||
Taxes paid on net settled stock-based compensation awards |
(86) |
(8) |
(162) |
||||
Other |
27 |
(12) |
(194) |
||||
(Increase) decrease in net debt before impact of changes in foreign exchange rates |
(432) |
949 |
(98) |
||||
Impact of changes in foreign exchange rates on net debt |
(53) |
(224) |
20 |
||||
(Increase) decrease in Net Debt |
(485) |
725 |
(78) |
||||
Net Debt, beginning of period |
(7,976) |
(9,186) |
(9,332) |
||||
Net Debt, end of period |
|
|
|
(1) |
“Net Debt” represents gross debt less cash and short-term investments. Management believes that Net Debt provides useful information to investors and management regarding the level of SLB’s indebtedness by reflecting cash and investments that could be used to repay debt. Net Debt is a non-GAAP financial measure that should be considered in addition to, not as a substitute for or superior to, total debt. |
(2) |
See section entitled “Charges & Credits” for details. |
(3) |
Includes depreciation of fixed assets and amortization of intangible assets, exploration data costs, and APS investments. |
(4) |
“Free cash flow” represents cash flow from operations less capital expenditures, APS investments, and exploration data costs capitalized. Management believes that free cash flow is an important liquidity measure for the company and that it is useful to investors and management as a measure of SLB’s ability to generate cash. Once business needs and obligations are met, this cash can be used to reinvest in the company for future growth or to return to shareholders through dividend payments or share repurchases. Free cash flow does not represent the residual cash flow available for discretionary expenditures. Free cash flow is a non-GAAP financial measure that should be considered in addition to, not as a substitute for or superior to, cash flow from operations. |
Charges & Credits
In addition to financial results determined in accordance with
(Stated in millions, except per share amounts) |
|||||
Third Quarter 2024 | |||||
Pretax | Tax | Noncont. Interests |
Net | Diluted EPS |
|
SLB net income (GAAP basis) |
|
|
|
|
|
Restructuring (1) |
65 |
10 |
- |
55 |
0.04 |
Merger & integration (2) |
47 |
10 |
7 |
30 |
0.02 |
SLB net income, excluding charges & credits |
|
|
|
|
|
Second Quarter 2024 | |||||
Pretax | Tax | Noncont. Interests |
Net | Diluted EPS |
|
SLB net income (GAAP basis) |
|
|
|
|
|
Restructuring (1) |
111 |
17 |
- |
94 |
0.07 |
Merger & integration (2) |
31 |
5 |
8 |
18 |
0.01 |
SLB net income, excluding charges & credits |
|
|
|
|
|
Nine Months 2024 | |||||
Pretax | Tax | Noncont. Interests |
Net | Diluted EPS |
|
SLB net income (GAAP basis) |
|
|
|
|
|
Restructuring (1) |
176 |
27 |
- |
149 |
0.10 |
Merger & integration (3) |
103 |
21 |
20 |
62 |
0.04 |
SLB net income, excluding charges & credits |
|
|
|
|
|
Nine Months 2023 | |||||
Pretax | Tax | Noncont. Interests |
Net | Diluted EPS |
|
SLB net income (GAAP basis) |
|
|
|
|
|
Gain on sale of Liberty shares (4) |
(36) |
(8) |
- |
(28) |
(0.02) |
SLB net income, excluding charges & credits |
|
|
|
|
|
(1) |
Classified in Restructuring in the Condensed Consolidated Statement of Income. |
(2) |
During the third quarter of 2024, |
(3) |
During the nine months of 2024, |
(4) |
Classified in Interest & other income in the Condensed Consolidated Statement of Income. |
There were no charges or credits during the third quarter of 2023.
Divisions
(Stated in millions) | |||||||||||
Three Months Ended | |||||||||||
|
|
|
|||||||||
Revenue |
Income Before Taxes |
Revenue | Income Before Taxes |
Revenue | Income Before Taxes |
||||||
Digital & Integration |
|
|
|
|
|
|
|||||
Reservoir Performance |
1,823 |
367 |
1,819 |
376 |
1,680 |
344 |
|||||
|
3,312 |
714 |
3,411 |
742 |
3,430 |
759 |
|||||
Production Systems |
3,103 |
519 |
3,025 |
473 |
2,367 |
319 |
|||||
Eliminations & other |
(167) |
(84) |
(166) |
(62) |
(149) |
(53) |
|||||
Pretax segment operating income |
1,902 |
1,854 |
1,683 |
||||||||
Corporate & other |
(187) |
(191) |
(182) |
||||||||
Interest income(1) |
36 |
29 |
20 |
||||||||
Interest expense(1) |
(132) |
(129) |
(126) |
||||||||
Charges & credits(2) |
(112) |
(142) |
- |
||||||||
|
|
|
|
|
|
(Stated in millions) | |||||||||
Nine Months Ended | |||||||||
|
|
||||||||
Revenue |
Income Before Taxes |
Revenue | Income Before Taxes |
||||||
Digital & Integration |
|
|
|
|
|||||
Reservoir Performance |
5,369 |
1,082 |
4,826 |
892 |
|||||
|
10,090 |
2,145 |
10,052 |
2,162 |
|||||
Production Systems |
8,946 |
1,392 |
6,888 |
802 |
|||||
Eliminations & other |
(491) |
(180) |
(443) |
(102) |
|||||
Pretax segment operating income |
5,404 |
4,655 |
|||||||
Corporate & other |
(568) |
(536) |
|||||||
Interest income(1) |
98 |
57 |
|||||||
Interest expense(1) |
(370) |
(363) |
|||||||
Charges & credits(2) |
(279) |
36 |
|||||||
|
|
|
|
(1) |
Excludes amounts which are included in the segments’ results. |
(2) |
See section entitled “Charges & Credits” for details. |
Supplementary Information
Frequently Asked Questions
1) |
What is the capital investment guidance for the full-year 2024? |
|
Capital investment (consisting of capex, exploration data costs, and APS investments) for the full-year 2024 is still expected to be approximately |
|
|
2) |
What were cash flow from operations and free cash flow for the third quarter of 2024? |
|
Cash flow from operations for the third quarter of 2024 was |
|
|
3) |
What was included in “Interest & other income” for the third quarter of 2024? |
|
“Interest & other income” for the third quarter of 2024 was |
|
|
4) |
How did interest income and interest expense change during the third quarter of 2024? |
|
Interest income of |
|
|
5) |
What is the difference between SLB’s consolidated income before taxes and pretax segment operating income? |
|
The difference consists of corporate items, charges and credits, and interest income and interest expense not allocated to the segments, as well as stock-based compensation expense, amortization expense associated with certain intangible assets, certain centrally managed initiatives, and other nonoperating items. |
|
|
6) |
What was the effective tax rate (ETR) for the third quarter of 2024? |
|
The ETR for the third quarter of 2024, calculated in accordance with GAAP, was 19.2% as compared to 19.4% for the second quarter of 2024. Excluding charges and credits, the ETR for both the third quarter of 2024 and for the second quarter of 2024 was 19.1%. |
|
|
7) |
How many shares of common stock were outstanding as of |
|
There were 1.412 billion shares of common stock outstanding as of |
(Stated in millions) |
|||||
Shares outstanding at |
1,420 |
||||
Shares issued under employee stock purchase plan |
3 |
||||
Shares issued to optionees, less shares exchanged |
- |
||||
Vesting of restricted stock |
- |
||||
Stock repurchase program |
(11) |
||||
Shares outstanding at |
1,412 |
8) |
What was the weighted average number of shares outstanding during the third quarter of 2024 and second quarter of 2024? How does this reconcile to the average number of shares outstanding, assuming dilution, used in the calculation of diluted earnings per share? |
The weighted average number of shares outstanding was 1.417 billion during the third quarter of 2024 and 1.428 billion during the second quarter of 2024. The following is a reconciliation of the weighted average shares outstanding to the average number of shares outstanding, assuming dilution, used in the calculation of diluted earnings per share. |
Third Quarter
|
(Stated in millions)
|
|||||
Weighted average shares outstanding |
1,417 |
1,428 |
||||
Unvested restricted stock |
14 |
14 |
||||
Assumed exercise of stock options |
1 |
1 |
||||
Average shares outstanding, assuming dilution |
1,432 |
1,443 |
9) |
What was SLB’s adjusted EBITDA in the third quarter of 2024, the second quarter of 2024, the third quarter of 2023, the first nine months of 2024, and the first nine months of 2023? What was SLB’s adjusted EBITDA margin for those periods? |
SLB’s adjusted EBITDA was |
(Stated in millions)
|
|||||||
Third Quarter 2024 |
Second Quarter 2024 |
||||||
Net income attributable to SLB |
|
|
|
||||
Net income attributable to noncontrolling interests |
32 |
33 |
13 |
||||
Tax expense |
289 |
276 |
259 |
||||
Income before taxes |
|
|
|
||||
Charges & credits |
112 |
142 |
- |
||||
Depreciation and amortization |
640 |
631 |
579 |
||||
Interest expense |
136 |
132 |
129 |
||||
Interest income |
(52) |
(38) |
(22) |
||||
Adjusted EBITDA |
|
|
|
||||
Revenue |
|
|
|
||||
Adjusted EBITDA margin |
25.6% |
25.0% |
25.0% |
SLB’s adjusted EBITDA was |
(Stated in millions) | |||||||
Nine Months 2024 |
Nine Months 2023 |
Change |
|||||
Net income attributable to SLB |
|
|
|||||
Net income attributable to noncontrolling interests |
95 |
36 |
|||||
Tax expense |
824 |
722 |
|||||
Income before taxes |
|
|
|||||
Charges & credits |
279 |
(36) |
|||||
Depreciation and amortization |
1,871 |
1,703 |
|||||
Interest expense |
381 |
373 |
|||||
Interest income |
(129) |
(59) |
|||||
Adjusted EBITDA |
|
|
15% |
||||
|
|||||||
Revenue |
|
|
12% |
||||
Adjusted EBITDA margin |
24.8% |
24.1% |
62 bps |
Adjusted EBITDA represents income before taxes, excluding charges & credits, depreciation and amortization, interest expense, and interest income. Management believes that adjusted EBITDA is an important profitability measure for SLB and that it provides useful perspective on SLB’s underlying business results and operating trends, and a means to evaluate SLB’s operations period over period. Adjusted EBITDA is also used by management as a performance measure in determining certain incentive compensation. Adjusted EBITDA should be considered in addition to, not as a substitute for or superior to, other measures of financial performance prepared in accordance with GAAP. |
|
|
|
10) |
What were the components of depreciation and amortization expense for the third quarter of 2024, the second quarter of 2024, and the third quarter of 2023, the first nine months of 2024, and the first nine months of 2023? |
The components of depreciation and amortization expense for the third quarter of 2024, the second quarter of 2024, and the third quarter of 2023 were as follows: |
(Stated in millions) | |||||||
Third Quarter 2024 |
Second Quarter 2024 |
Third Quarter 2023 |
|||||
Depreciation of fixed assets |
|
|
|
||||
Amortization of intangible assets |
87 |
82 |
78 |
||||
Amortization of APS investments |
124 |
118 |
107 |
||||
Amortization of exploration data costs capitalized |
35 |
47 |
29 |
||||
|
|
|
The components of depreciation and amortization expense for the nine months ended |
(Stated in millions) |
||||||
Nine Months 2024 |
Nine Months 2023 |
|||||
Depreciation of fixed assets |
|
|
||||
Amortization of intangible assets |
250 |
231 |
||||
Amortization of APS investments |
355 |
299 |
||||
Amortization of exploration data costs capitalized |
111 |
108 |
||||
|
|
11) |
What Divisions comprise SLB’s Core business and what were their revenue and pretax operating income for the third quarter of 2024, the second quarter of 2024, and the third quarter of 2023? |
SLB’s Core business comprises the Reservoir Performance, |
(Stated in millions) |
|||||||||||
Three Months Ended | Change | ||||||||||
2024 |
2024 |
2023 |
Sequential | Year-on-year | |||||||
Revenue | |||||||||||
Reservoir Performance |
|
|
|
||||||||
|
3,312 |
3,411 |
3,430 |
||||||||
Production Systems |
3,103 |
3,025 |
2,367 |
||||||||
|
|
|
- |
10% |
|||||||
Pretax Operating Income | |||||||||||
Reservoir Performance |
|
|
|
||||||||
|
714 |
742 |
759 |
||||||||
Production Systems |
519 |
473 |
319 |
||||||||
|
|
|
1% |
12% |
|||||||
Pretax Operating Margin | |||||||||||
Reservoir Performance |
20.1% |
20.6% |
20.5% |
||||||||
|
21.5% |
21.7% |
22.1% |
||||||||
Production Systems |
16.7% |
15.6% |
13.5% |
||||||||
19.4% |
19.3% |
19.0% |
16 bps | 40 bps |
About SLB
SLB (NYSE: SLB) is a global technology company driving energy innovation for a balanced planet. With a global presence in more than 100 countries and employees representing almost twice as many nationalities, we work each day on innovating oil and gas, delivering digital at scale, decarbonizing industries, and developing and scaling new energy systems that accelerate the energy transition. Find out more at slb.com.
Conference Call Information
SLB will hold a conference call to discuss the earnings press release and business outlook on
Forward-Looking Statements
This third-quarter 2024 earnings press release, as well as other statements we make, contain “forward-looking statements” within the meaning of the federal securities laws, which include any statements that are not historical facts. Such statements often contain words such as “expect,” “may,” “can,” “believe,” “predict,” “plan,” “potential,” “projected,” “projections,” “precursor,” “forecast,” “outlook,” “expectations,” “estimate,” “intend,” “anticipate,” “ambition,” “goal,” “target,” “scheduled,” “think,” “should,” “could,” “would,” “will,” “see,” “likely,” and other similar words. Forward-looking statements address matters that are, to varying degrees, uncertain, such as statements about our financial and performance targets and other forecasts or expectations regarding, or dependent on, our business outlook; growth for SLB as a whole and for each of its Divisions (and for specified business lines, geographic areas, or technologies within each Division); oil and natural gas demand and production growth; oil and natural gas prices; forecasts or expectations regarding energy transition and global climate change; improvements in operating procedures and technology; capital expenditures by SLB and the oil and gas industry; our business strategies, including digital and “fit for basin,” as well as the strategies of our customers; our capital allocation plans, including dividend plans and share repurchase programs; our APS projects, joint ventures, and other alliances; the impact of the ongoing conflict in
This press release also includes forward-looking statements relating to the proposed transaction between SLB and ChampionX, including statements regarding the benefits of the transaction and the anticipated timing of the transaction. Factors and risks that may impact future results and performance include, but are not limited to, and in each case as a possible result of the proposed transaction on each of SLB and ChampionX: the ultimate outcome of the proposed transaction between SLB and ChampionX; the effect of the announcement of the proposed transaction; the ability to operate the SLB and ChampionX respective businesses, including business disruptions; difficulties in retaining and hiring key personnel and employees; the ability to maintain favorable business relationships with customers, suppliers, and other business partners; the terms and timing of the proposed transaction; the occurrence of any event, change, or other circumstance that could give rise to the termination of the proposed transaction; the anticipated or actual tax treatment of the proposed transaction; the ability to satisfy closing conditions to the completion of the proposed transaction; other risks related to the completion of the proposed transaction and actions related thereto; the ability of SLB and ChampionX to integrate the business successfully and to achieve anticipated synergies and value creation from the proposed transaction; the ability to secure government regulatory approvals on the terms expected, at all or in a timely manner; litigation and regulatory proceedings, including any proceedings that may be instituted against SLB or ChampionX related to the proposed transaction, as well as the risk factors discussed in SLB’s and ChampionX’s most recent Forms 10-K, 10-Q, and 8-K filed with or furnished to the
If one or more of these or other risks or uncertainties materialize (or the consequences of any such development changes), or should our underlying assumptions prove incorrect, actual results or outcomes may vary materially from those reflected in our forward-looking statements. Forward-looking and other statements in this press release regarding our environmental, social, and other sustainability plans and goals are not an indication that these statements are necessarily material to investors or required to be disclosed in our filings with the
Additional Information about the Transaction with ChampionX and Where to Find It
In connection with the proposed transaction with ChampionX, SLB filed with the
View source version on businesswire.com: https://www.businesswire.com/news/home/20241016795721/en/
Investors
Tel: +1 (713) 375-3535
Email: investor-relations@slb.com
Media
Tel: +1 (713) 375-3407
Email: media@slb.com
Source: SLB