SLB Stock Gains on Topped Forecast, $2.3 Billion Buyback

By Dean Seal

Shares of SLB advanced after the oilfield services giant announced a $2.3 billion stock buyback, bumped dividend payouts higher and reported quarterly earnings that topped Wall Street views.

The stock was up 2% at $41.91 in premarket trading. Shares were trading at around $47.89 this time a year ago.

The company formerly known as Schlumberger said Friday that its fourth-quarter per-share profit was flat year over year and, adjusted for one-time items, came out to 92 cents a share. That beat analyst forecasts for 90 cents a share, according to FactSet.

Revenue rose 3% to $9.28 billion, clearing analyst targets by $100 million, thanks to higher activity in the Middle East, Europe and North America. SLB logged higher revenue in every region it serves except Latin America.

The company's adjusted earnings before interest, taxes, depreciation and amortization also beat estimates, largely from gains in its digital and integration business, as well as lower corporate taxes, TD Cowen analysts said in a research note.

Chief Executive Olivier Le Peuch said in the earnings report that upstream investment growth is expected to remain subdued in the short term due to global oversupply, but the imbalance should gradually abate. SLB is well positioned as energy demand for AI and data centers ramps up and energy security becomes a bigger focus around the world, the CEO said.

That confident outlook prompted SLB's board to raise its quarterly dividend by 3.6% to 28.5 cents a share, due to be paid out in early April.

SLB said it has also entered into accelerated share-repurchase transactions to buy back $2.3 billion of its shares. About 80% of those shares were repurchased earlier this week, and the rest will be bought back by the end of May, said the company.

Le Peuch said SLB's stock is undervalued relative to the strength of its business. The company is looking to return at least $4 billion to shareholders this year, up from $3.3 billion in 2024, it said.

SLB's optimism comes as President-elect Donald Trump prepares to issue executive orders aimed at boosting American fossil fuels. Despite the incoming administration's pro-drilling stance, oilfield services companies are still expected to see a flattish year ahead, Raymond James analysts James Rollyson and Connor Jensen said in a recent research note. Capital expenditure budgets released by large operators so far suggest that activity could be flat or even decline, the analysts said.

Write to Dean Seal at dean.seal@wsj.com