Jan 20 (Reuters) – The world’s largest oilfield services firm, SLB (SLB.N), beat Wall Street estimates for fourth-quarter profit on Friday, driven by strong demand for drilling services and equipment as oil and gas prices remained elevated amid tight supplies.
SLB, formerly called Schlumberger, has benefited from increased oil drilling and production in North America and elsewhere. Revenue from North America rose 27% to $1.63 billion in the reported quarter, while international revenue jumped 26% to $6.2 billion.
Brent oil prices are currently around $86.24 a barrel, and averaged around $84 a barrel during the fourth quarter, up from close to $79 a barrel a year ago. The average international rig count for the quarter stood at 1,872, nearly 22% higher than the previous year, according to Baker Hughes.
“Global upstream spending projections continue to trend positively. Activity growth is expected to be broad-based, marked by an acceleration in international basins,” Olivier Le Peuch, SLB’s chief executive officer, said in a statement, adding a loosening of COVID-19 restrictions in China would be supportive this year.
Shares were up 1.7% in pre-market trading at $58.36 each. They’re up 55% from a year ago.
Le Peuch expects the oilfield market to see higher service pricing as capacity remains tight. In the reported quarter, SLB saw its pretax EBITDA margins grow to 24.4% year-over-year.
The company’s fourth-quarter pre-tax operating margins and per share earnings were the highest since 2015.
Though SLB has been able to increase prices for customers, it has felt the effects of higher inflation. For 2022, SLB’s capital investments totaled $2.3 billion, up from an expected $2.2 billion. It anticipates to spend between $2.5 billion and $2.6 billion in 2023.
The company’s net income excluding items was $1.03 billion, or 71 cents per share, for the three months ended Dec. 31, compared with analysts’ estimate of 68 cents per share, according to Refinitiv data.
Reporting by Arunima Kumar in Bengaluru and Liz Hampton in Denver; Editing by Krishna Chandra Eluri and Mark Potter
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