Oilfield services giant SLB beats first-quarter profit estimates By Reuters

By Arunima Kumar and Liz Hampton

(Reuters) -High oilfield agency supplier SLB beat Wall Avenue estimates for first-quarter revenue on Friday, as elevated crude costs and tight provides elevated demand for its companies and tools.

International oil costs averaged $81.24 a barrel within the January-March quarter, down practically 20% from a yr earlier however nonetheless properly above a degree the place oil and gasoline producers can drill profitably.

futures had been buying and selling round $81.50 a barrel on Friday, up half a p.c.

A current choice by OPEC+ producer international locations to assist commodity costs via an output minimize is offering operators with elevated confidence, mentioned SLB CEO Olivier Le Peuch mentioned in an announcement.

“The worldwide and offshore markets proceed to expertise a robust resurgence of exercise pushed by resilient long-cycle improvement and capability enlargement tasks,” he mentioned.

Quarterly income in SLB’s worldwide enterprise grew by 29% year-on-year to $5.97 billion, whereas North American income was up 32% over that interval to $1.7 billion.

SLB expects to publish its highest income ever within the Center East, Le Peuch advised traders throughout a name.

Le Peuch warned the North American land market may see exercise plateau in 2023 as a consequence of decrease costs and capital restraint by personal E&P operators. The corporate lowered its outlook for North American development this yr, due primarily to weak spot in pure gasoline markets, that are down about 50% this yr.

SLB shares had been down about 2.8% in early buying and selling to $50.51.

Wall Avenue analysts usually considered the outcomes as constructive, pointing to the earnings beat.

“SLB continues to see constructive pricing as efficiency differentiates, know-how adoption will increase, contract phrases are adjusted to offset inflation, and repair capability continues to tighten in key worldwide markets,” wrote analysts for Piper Sandler in a observe on Friday.

The corporate reported free money move of damaging $265 million for the quarter, which it mentioned was seasonally regular.

SLB anticipates mid- to high-single digit income development this quarter, with margins to extend by 50 to 100 foundation factors.

It reported web revenue, excluding objects, of 63 cents per share, for the three months ended March 31, in contrast with 60 cents anticipated by analysts, in accordance with Refinitiv knowledge.