Schlumberger ((SLB)) has held its Q4 earnings call. Read on for the main highlights of the call.
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The recent earnings call for SLB revealed a balanced outlook, showcasing a strong financial performance and significant growth in digital and low-carbon markets. Despite encountering challenges in specific regions and segments, the overall sentiment remained positive as the company continues to navigate the evolving market landscape.
Strong Fourth Quarter Revenue and Free Cash Flow
SLB reported impressive figures for the fourth quarter, achieving a new cycle high in international revenue and generating a robust free cash flow of $1.63 billion. This financial strength underscores the company’s successful strategies and operational efficiencies during the period.
Full Year 2024 Performance and Shareholder Returns
For the full year 2024, SLB demonstrated a solid financial performance with an adjusted EBITDA margin of 25% and a strong free cash flow generation of $4 billion. The company returned $3.3 billion to shareholders, emphasizing its commitment to delivering value.
Digital Revenue Growth
SLB’s digital segment showed remarkable growth, with revenue increasing by 20% for the year. This exceeded their high-teens target, driven by strategic industry partnerships, highlighting the significance of digital transformation in SLB’s growth strategy.
Low Carbon and Digital Infrastructure Expansion
The company made significant strides in low-carbon markets, with revenue surpassing $850 million in 2024. Looking forward, SLB anticipates continued growth in this area, further expanding its digital infrastructure capabilities.
Accelerated Share Repurchase Program
Reflecting confidence in its financial health, SLB initiated accelerated share repurchase transactions amounting to $2.3 billion, demonstrating its proactive approach to enhancing shareholder value.
Declines in Key Regions
Challenges in Saudi Arabia and Mexico led to revenue declines, though these were mitigated by gains in other regions, showcasing SLB’s resilience and adaptability in diverse markets.
Flat Growth in Well Construction
The well construction segment faced challenges with flat revenue growth year-on-year, indicating hurdles in sustaining momentum in this particular area.
Russia Revenue Decline
Revenue from Russia saw a slight decline, accounting for 4% of global revenue in 2024, down from 5% the previous year, reflecting geopolitical and market dynamics.
Lower Activity in Deepwater Markets
The offshore markets are expected to remain muted in 2025 due to limited activity in deepwater projects, presenting challenges for SLB in these sectors.
Forward-Looking Guidance
Looking ahead to 2025, SLB expects to maintain its adjusted EBITDA margin at or above 2024 levels despite anticipating flat revenue. Growth is projected in digital operations and low-carbon markets, particularly in the Middle East, Argentina, and Brazil. The company also plans to return a minimum of $4 billion to shareholders through dividends and share repurchases, reflecting a focus on shareholder value.
In summary, SLB’s earnings call painted a picture of resilience and strategic growth, with strong financial performance and expansion into digital and low-carbon markets. Despite encountering regional challenges, the company remains optimistic about its future prospects, driven by its diversified portfolio and commitment to shareholder returns.
