SLB Shares Rise as Oilfield Services Firm Beats Profit Estimates
SLB, the top US oilfield services firm, beat quarterly profit estimates as resilient demand in key markets offset weakness in the Middle East due to the Iran war. The company's shares rose 2% before the bell.
The Iran war has kept a crucial oil-producing region on edge, with Iran seeking to shut the Bab el-Mandeb gateway to the Red Sea after choking off shipping through the Strait of Hormuz. This had a significant impact on SLB's revenue from the Middle East and Asia, which dropped 14% to $2.57 billion in the quarter.
However, total revenue during the quarter climbed to $8.97 billion, driven by a 36% jump in North America. Growth in this region was supported by higher offshore activity, a rebound in US shale oil and gas drilling activity, as well as strong demand for production and recovery solutions.
SLB CEO Olivier Le Peuch said that while activity began to recover in certain countries during the second quarter, 'the timing of a full recovery remains uncertain and will depend on a durable resolution of the conflict.' A return to full production capacity is expected to take time.