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By Arathy Somasekhar and Seher Dareen
(Reuters) – Oil company SLB on Friday raised its quarterly dividend and accelerated share buybacks as its fourth-quarter profit beat expectations, while warning of flat revenue in 2025 due to of the excess supply of oil.
The world’s largest oilfield services company raised its quarterly dividend by 3.6% and said it would buy back $2.3 billion in shares at an “accelerated” pace.
Shares of SLB, formerly Schlumberger, rose 7.4% to $44.13 by 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 are expected to be similar to the prior year level.
“Clients took a more cautious approach to short-term activity and discretionary spending, driven primarily by concerns about an oversupplied market,” said Olivier Le Peuch, chief executive of SLB.
Global 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 pick up in the second quarter, particularly in international markets, Le Peuch said, as he expects “the oil supply imbalance to gradually reduce”.
SLB, which has focused on its international business to offset slowing US revenue growth, reported a 3% rise in its quarterly revenue from foreign markets, the smallest growth since the first quarter of 2021 , when the COVID-19 pandemic reduced demand.
Revenue in Latin America declined 5% year-over-year, driven primarily by reduced drilling activity in Mexico, the company said. The declines were offset by 7% growth in the Middle East and Asia.
International business accounts for around 80% of SLB’s total revenue.
US revenue grew 7%, the most since the second quarter of 2023, driven by increased digital sales and offshore activity in the US Gulf of Mexico. Onshore drilling activity in the United States declined.
The company said revenue from SLB’s operations in Russia has also been declining, accounting for 4% of its total revenue, down from 5% a year earlier.
He said he believes the voluntary steps he took in 2023, such as halting shipments of products and technology to Russia from all SLB facilities worldwide, align with U.S. sanctions on this month in Russia.
