SLB (SLB) reported robust results in the second quarter. The company’s adjusted earnings for Q2 came in at $0.85 per share, an increase of 18% year-over-year, surpassing analysts’ consensus estimate of $0.83 per share. SLB’s Q2 adjusted Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) grew 17% year-over-year to $2.3 billion, and the company expects its FY24 EBITDA to grow in the “mid-teens.”
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SLB’s Q2 Revenue Breakdown
The offshore drilling company generated revenues of $9.1 billion, up 13% year-over-year, compared to Street estimates of $9.08 billion. The company’s strong results were largely driven by broad-based growth in its international revenues, which surged 18% year-over-year to $7.5 billion. International revenues comprised more than 80% of SLB’s total revenues in the second quarter.
The company’s management stated that its international business continued to benefit from “elevated activity in the Middle East & Asia, particularly in gas, and our clients’ increased investments in deepwater basins, exploration, and digital.” The increased oil drilling activity in the Middle East and Asia is leading to higher demand for its equipment.
SLB’s Dividends and Stock Buyback
The company’s Board of Directors has approved a quarterly cash dividend of $0.275 per share, payable on October 10 to shareholders of record as of September 4, 2024. Additionally, SLB repurchased 9.9 million shares during the second quarter at a total cost of $735 million.
Is SLB a Good Stock to Buy?
Analysts remain bullish about SLB stock, with a Strong Buy consensus rating based on 15 Buys and one Hold. Over the past year, SLB has declined by more than 10%, and the average SLB price target of $66 implies an upside potential of 35.5% from current levels. These analyst ratings are likely to change following SLB’s Q2 results today.
