TLDR
- Revenue dropped 3% year over year, missing expectations.
- Adjusted EPS came in at $0.72, missing consensus estimates.
- North America revenue rose 8%, but international sales declined 5%.
- Schlumberger reaffirmed its commitment to return over $4 billion to shareholders.
- Macroeconomic and tariff-related risks could weigh on future demand.
Schlumberger Limited (NYSE: SLB) closed at $34.52 on April 25, 2025, down 1.17% for the day. The oilfield services giant reported disappointing first-quarter 2025 earnings, with revenue falling 3% year over year to $8.5 billion, missing analysts’ estimates of $8.59 billion. Adjusted earnings per share (EPS) were $0.72, slightly below the expected $0.74.
The company’s earnings date for Q2 2025 is between July 17 and July 21. Despite the miss, Schlumberger’s adjusted EBITDA margin improved by 18 basis points to 23.8%, highlighting efforts to maintain profitability amid softening activity.
Revenue Dynamics Highlight Challenges
North American revenue increased 8% year over year, led by offshore markets and higher sales in digital solutions and subsea systems. However, sequential growth declined slightly due to reduced drilling activity. International revenue dropped 5% year over year, driven by weak performances in Latin America and declining drilling operations in Mexico and Saudi Arabia.
Segment-wise, Digital & Integration revenue grew 6%, with digital revenue surging 17%. Meanwhile, the Well Construction division faced a 12% revenue fall, reflecting lower drilling demand globally.
Focus on Cash Flow and Shareholder Returns
Despite operational headwinds, Schlumberger generated $660 million in operating cash flow and $103 million in free cash flow for the quarter. Cash and equivalents totaled $3.9 billion as of March 31, 2025. The company raised its dividend, declaring a quarterly payout of $0.285 per share payable on July 10, 2025, with an ex-dividend date of June 4, 2025.
Management reaffirmed its commitment to return more than 50% of free cash flow to shareholders, aiming to exceed $4 billion in total payouts this year. The company completed a $2.3 billion accelerated share repurchase program in early April 2025, buying back nearly 57 million shares at an average price of $40.51.
Performance Overview
Schlumberger’s stock performance has been mixed over different time frames. Year-to-date as of April 25, 2025, the stock is down 9.34%, compared to a 6.06% decline for the S&P 500. Over the past year, SLB shares have plunged 28.33%, sharply underperforming the S&P 500’s 9.44% gain.
However, on a longer horizon, SLB delivered a strong 137.4% return over five years, outpacing the S&P 500’s 94.77% rise. The three-year performance shows a small 5.01% loss, while the broader market posted a 28.61% gain during the same period.
Macroeconomic Risks Remain
CEO Olivier Le Peuch warned of macroeconomic risks, including fluctuating oil prices, potential tariff impacts, and evolving global demand patterns. While Schlumberger’s five-year return stands strong at 137.4%, the stock has dropped 28.33% over the past year and 9.34% year-to-date, underperforming the broader S&P 500 Index.
The company expects a challenging 2025 for upstream oil and gas investment but remains focused on protecting margins, enhancing digital revenue, and delivering consistent shareholder value.
