Schlumberger Limited. (NYSE:SLB) has reported first-quarter revenue and earnings that came in ahead of consensus estimates as it benefitted from strong demand for its oilfield services.
In an earnings statement, the company said its revenue growth has surpassed rig count growth both in North America and internationally—representing the highest year-on-year quarterly growth in over a decade.
“The international and offshore markets continue to experience a strong resurgence of activity driven by resilient long-cycle development and capacity expansion projects,” CEO Olivier Le Peuch said in a statement.
The oil services company grew revenue by 30% to $7.74 billion for the three months to March 31, 2023, ahead of the $7.44 billion forecast by FactSet. Net income rose 83% to $934 million, while adjusted earnings per share (EPS) jumped 85% to $0.63, ahead of the $0.60 expected by FactSet.
However, cash flow from operations of $330 million, up from $131 million, was less than half the $710 million FactSet had predicted.
Le Peuch said this reflected the seasonal first-quarter buildup of working capital that will support the company’s anticipated growth for the year and the payment of its annual incentives.
“Free cash flow generation is expected to accelerate throughout the year, consistent with historical trends” he added.
Schlumberger said the global activity outlook for the full-year 2023 remains solid, supported by the long-term demand outlook for oil and gas, investments to expand oil capacity and diversify gas supply, and the emergency of gas as a long-term energy transition fuel and enabler of energy security.
“Taken together, these market dynamics play to our strengths and create an advantaged position for SLB,” Le Peuch said. “Our strategy, global footprint, unique integration capabilities, and portfolio actions have strengthened our ability to support our customers.”
The company’s shares declined 0.6% in pre-market trade.
Contact the author at stephen.gunnion@proactiveinvestors.com