By Arathy Somasekhar and Seher Dareen
(Reuters) – Oilfield company SLB raised its quarterly dividend and accelerated share buybacks on Friday as its fourth-quarter profit beat expectations, while also warning of flat revenue in 2025 due to oil oversupply.
The world's largest oilfield services company increased its quarterly dividend by 3.6%, and said it would buy back $2.3 billion of shares at a “fast” pace.
Shares of SLB, formerly known as Schlumberger, rose 7.4% to $44.13 at midday.
First-quarter and full-year revenue would be largely unchanged from the same periods last year, as excess oil supply limits oilfield activity, the company said.
Adjusted earnings before interest, taxes, depreciation and amortization for 2025 are expected to be at or above 2024 levels, while those for the current quarter will be similar to the year-ago level.
“Customers adopted a more cautious approach to near-term activity and discretionary spending, driven primarily by concerns about an oversupplied market,” said SLB CEO Olivier Le Peuch.
Global upstream investment this year will be largely flat compared to 2024, Le Peuch added, as growth in the United Arab Emirates, Kuwait, Iraq, China and India is offset by declines in Saudi Arabia, Egypt and Mexico.
Activity will rebound in the second quarter, especially in the international markets, Le Peuch said, as he expects “oil supply imbalances to gradually decrease.”
SLB, which has been focusing on its international business to offset slow North American revenue growth, posted a 3% increase in its quarterly revenue from overseas markets, the smallest growth since the first quarter of 2021 when the COVID-19 pandemic reduced demand.
Revenue in Latin America fell 5% year-over-year, driven primarily by lower drilling activity in Mexico, the company said. The declines were offset by 7% growth in the Middle East and Asia.
International business accounts for approximately 80% of SLB's total revenue.
North American revenue grew 7%, the most since the second quarter of 2023, driven by higher digital sales and offshore activity in the US Gulf of Mexico. US land drilling activity declined.
The company said revenue from SLB's operations in Russia had also been falling, accounting for 4% of its total revenue, down from 5% the previous year.
He said he believed voluntary measures he took in 2023, such as halting the shipment of goods and technology to Russia from all SLB facilities around the world, were in line with the US sanctions on Russia this month.