By Arathy Somasekhar and Seher Dareen
(Reuters) – Oilfield company SLB raised its quarterly dividend and accelerated share repurchases on Friday as its fourth-quarter profit beat expectations, while also warning of flat 2025 revenue attributable to an oil oversupply.
The world’s largest oilfield services company increased its quarterly dividend by 3.6%, and said it could buy back $2.3 billion of shares at an “accelerated” pace.
Shares of SLB, previously called Schlumberger, rose 7.4% to $44.13 at midday.
First-quarter and full-year revenue would largely be unchanged from the identical periods last yr, as excess oil supply limits oilfield activity, the corporate said.
Adjusted earnings before interest, taxes, depreciation and amortization for 2025 are expected to be at or above 2024 levels, while those for the present quarter will likely be just like the year-ago level.
“Customers adopted a more cautious approach to near-term activity and discretionary spending, primarily driven by concerns of an oversupplied market,” said SLB Chief Executive Officer Olivier Le Peuch.
Global upstream investment this yr will largely be regular in comparison with 2024, Le Peuch added, as growth in United Arab Emirates, Kuwait, Iraq, China and India is offset by declines in Saudi Arabia, Egypt and Mexico.
Activity will rebound within the second quarter, particularly within the international markets, Le Peuch said, as he expects “oil supply imbalance to step by step abate.”
SLB, which has been specializing in its international business to offset slowing North American revenue growth, posted a 3% rise in its quarterly revenue from foreign markets, the smallest growth because the first quarter of 2021 when the COVID-19 pandemic slashed demand.
Revenue in Latin America declined 5% year-over-year, driven primarily by reduced drilling activity in Mexico, the corporate said. The declines were offset by 7% growth within the Middle East and Asia.
International business accounts for about 80% of SLB’s total revenue.
North American revenue grew 7%, essentially the most because the second quarter of 2023, driven by higher digital sales and offshore activity within the U.S. Gulf of Mexico. U.S. land drilling activity declined.
The corporate said revenue from SLB’s operations in Russia has also been declining, accounting for 4% of its total revenue, down from 5% the yr before.
It said it believes that voluntary measures it took in 2023, similar to halting shipments of product and technology into Russia from all SLB facilities worldwide, are aligned with this month’s U.S. sanctions on Russia.