SLB Earnings: SLB Stock Gushes Higher as Q2 Earnings Beat Forecasts
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Headwinds Resilience
SLB reported adjusted earnings per share of $0.74 for the quarter, down from $0.85 in the prior three-month period, but above Bloomberg consensus expectations of $0.73.
Revenues dropped by 6.5% to $8.55 billion, but again beat forecasts of $8.48 billion. The performance kept up the company's forecast-beating heritage.
Last month the company pointed out in a presentation that weaker drilling activity in Saudi Arabia and Latin America could impact earnings.
However, today CEO Olivier Le Peuch said the returns demonstrated its resilience to headwinds from softer upstream spending and broader economic uncertainty.
'The market is navigating several dynamics — including fully supplied oil markets, OPEC+ supply releases, ongoing trade negotiations and geopolitical conflicts. Despite this, commodity prices have remained range bound. Meanwhile, customers have selectively adjusted activity, prioritizing key projects and planning cautiously. In this context, the upstream market has remained relatively resilient, underscoring the enduring strength of our industry,' Le Peuch said.
Digital Delight
Its digital division, where it is 'partnering with customers to migrate their technology and workflows into the cloud, to embrace new AI-enabled capabilities,' saw a 7% lift in pre-tax operating income to $327 million. Revenues slipped 1% to $995 million.
This includes deploying its AI platform on Mistral Compute, the integrated AI compute offering introduced by Mistral AI.
SLB also intends to increase its exposure to the 'less cyclical and growing production and recovery space' via its $8 billion acquisition of ChampionX, (CHX) which closed earlier this week.
On TipRanks, SLB has a Strong Buy consensus based on 14 Buy and 2 Hold ratings. Its highest price target is $53. SLB stock's consensus price target is $45.38 implying a 30.89% upside.
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