SLB Limited (SLB) Earnings & Analysis

Latest quarter

SLB reported Q3 FY2026 revenue of $9.4 billion, above the consensus estimate of $9.3 billion. Adjusted earnings per share of $0.64 also exceeded the consensus estimate of $0.62.

Revenue rose from $8.9 billion a year earlier, while diluted earnings per share fell to $0.49 from $0.50. CFO Stephane Biguet said the quarter included a $187 million noncash pension settlement charge and merger and integration charges associated with ChampionX.

SLB’s filing said Production Systems revenue increased sequentially to $4.0 billion, helped by sales in the Middle East and OneSubsea activity in Europe and Africa. Well Construction revenue reached $2.9 billion as Middle East drilling activity increased, while Digital revenue declined sequentially to $693 million after lower exploration-data sales.

The filing said the ChampionX acquisition contributed to year-on-year revenue growth in the first nine months; excluding it, nine-month revenue declined as Middle East operations were disrupted. SLB’s operating margin for the quarter was 11.5%, compared with 11.9% a year earlier. Biguet said the company generated $828 million in quarterly free cash flow.

Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.

What management said on the call

CEO Olivier Le Peuch said revenue grew sequentially across SLB’s geographic areas as Middle East operations gradually recovered, North American activity increased and offshore work continued internationally. He said “the near term pace of recovery in The Middle East remains uncertain,” but pointed to Saudi Aramco’s award of four integrated well-construction contracts covering more than 450 wells over an initial three-year term.

Asked about late-quarter disruptions, Le Peuch said activity had picked up in several countries as security conditions eased, while Iraq had not seen the same uplift. He said SLB was mobilizing for the Saudi contracts in the fourth quarter, with full capacity expected in 2027.

CFO Stephane Biguet told analysts that SLB had adjusted its Middle East resources only partially: “we are keeping some resources in place.” He said that would limit the additional cost of responding when activity rebounds. Biguet also said pricing pressure had affected some core divisions and that he hoped it would ease in 2027. He said Digital could support company margins, while the growing Data Center Solutions business was not accretive to SLB’s overall margin; he would provide more detail on 2027 margins in January.

On demand beyond the Middle East, Le Peuch said OneSubsea awards were adding to backlog and improving revenue visibility. Asked about Venezuela, he said SLB had signed contracts as international operators reached agreements in the country and had begun work with another large contractor. He said the company was adding equipment and people as activity increased.

Le Peuch said Data Center Solutions was expanding into Asia while near-term growth remained centered on North America. Biguet said SLB had established an integration team for the pending Kelvion acquisition and was making the necessary filings, with closing expected in the first half of 2027. He also said the fourth-quarter increase in free cash flow would depend in part on the timing of customer collections.

Guidance

SLB now expects fourth-quarter revenue of approximately $10 billion, up 5% to 7% sequentially, assuming Middle East revenue remains flat at approximately $1.9 billion. On its prior call, SLB expected fourth-quarter revenue to surpass $10 billion, representing approximately 5% year-on-year growth.

Le Peuch said SLB expects to surpass its $9 billion subsea bookings target across two years; on the prior call, the company had set an ambition to reach $9 billion over two years.