Schlumberger, a leading oilfield services company, has posted results for the second quarter that surpassed expectations, with a notable surge in revenue driven by significant growth in key international markets. For the June quarter, adjusted earnings reached $0.85 per share, a marked increase from $0.72 per share in the same period last year, and exceeding the consensus estimate of $0.83 as surveyed by Capital IQ.
Revenue for the quarter grew by 13% year over year, totaling $9.14 billion, which also topped analysts' expectations, which averaged $9.09 billion. In a statement, Chief Executive Olivier Le Peuch emphasized the company’s solid performance, stating, “We achieved solid second-quarter results, with broad-based international revenue growth and margin expansion across all divisions.” He highlighted the impressive trajectory of Schlumberger's core business, which demonstrated ongoing positive momentum, alongside a rapidly expanding digital segment.
This led to the company recording its highest quarterly international revenue since 2014. Digging deeper into the revenue drivers, international sales improved by 18%, reaching $7.45 billion. This was primarily fueled by a 24% uptick in the Middle East and Asia, and a 20% expansion in Europe and Africa's markets.
However, the North American market saw a decline in revenue, which fell to $1.64 billion from $1.75 billion in the same quarter last year. This dip was attributed to reduced drilling activity in U.S. land areas and a decrease in the sales of production systems within the Gulf of Mexico. Specifically, revenue from production systems soared by 31%, amounting to $3.03 billion, while well construction operations experienced a marginal increase of 1%, bringing in $3.41 billion.
The reservoir performance division also posted impressive results, growing 11% to $1.82 billion. The growth in this segment was supported by increased levels of stimulation and intervention activity, as noted by Schlumberger. On the digital front, the integration sales witnessed a rise, escalating to $1.05 billion from $947 million reported the previous year.
This digital growth underscores the increasing significance of technology in the oilfield services domain. Looking to the future, Le Peuch provided insights into the third quarter and beyond, stating, “Looking ahead to the second half of the year, we expect ongoing momentum in the international markets, strong digital sales, and our cost efficiency programs will enable us to expand margins and deliver our ambition to grow full-year adjusted earnings before interest, taxes, depreciation, and amortization in the mid-teens.” He further affirmed that the underlying fundamentals driving this cycle remain robust, attributing a long tailwind of growth opportunities paving the way for the company’s success beyond 2024. In terms of market performance, the stock price for Schlumberger is currently listed at $49.70, reflecting a change of +0.98, which represents a percent change of +2.01..