SLB Earnings: Third-Quarter Results Reflect Favorable Oil and Gas Activity in International Markets

Narrow-moat SLB maintained its solid growth trajectory in the third quarter, with revenue increasing 11% year over year, the firm’s ninth straight quarter of double-digit growth. Adjusted EBITDA margin was 24%, up more than 100 basis points both year over year and sequentially. We’ll incorporate the firm’s full financial and operating results shortly, but after this first look, we maintain our $56 fair value estimate.

Strong international activity was the driving force behind SLB’s third-quarter results and will remain central to the firm’s performance moving forward. The Middle East was a high point, with regional revenue expanding 8% quarter over quarter and 22% year over year, by far the highest top-line growth of all SLB’s geographies. The firm is on track to earn record revenues in the Middle East and Asia for fiscal 2023. SLB’s Middle Eastern operations typically feature longer-term contracts and are rather diversified, featuring exposure to both oil and gas markets, onshore and offshore projects, with operations spanning multiple countries. We expect these characteristics will facilitate steady revenue streams moving forward.