Schlumberger Limited (SLB) Bundle
A Brief History of Schlumberger Limited
Schlumberger Limited, a leading provider of technology and services for the oil and gas industry, has evolved significantly since its founding in 1926. The company was established in France by brothers Conrad and Marcel Schlumberger, initially focusing on the development of electrical resistivity measurements in oil wells. Over the decades, Schlumberger expanded its operations globally, becoming a key player in oilfield services.
Recent Developments (2024)
As of 2024, Schlumberger continues to demonstrate strong financial performance. The company's total revenue for the first nine months of 2024 reached $27.0 billion, a 12% increase from $24.1 billion in the same period of 2023. This growth was driven primarily by the acquisition of the Aker Solutions subsea business, which was completed in late 2023, contributing significantly to international revenue growth, particularly in the Middle East and Asia.
Financial Overview
In the third quarter of 2024, Schlumberger reported revenue of $9.2 billion, with a net income of $1.2 billion, reflecting a strong operational performance amid fluctuating oil prices. The company’s earnings before interest and taxes (EBIT) for the same quarter stood at $1.5 billion, showcasing a robust margin expansion driven by cost optimization and increased adoption of digital products.
| Financial Metrics | Q3 2024 | Q3 2023 | 9M 2024 | 9M 2023 |
|---|---|---|---|---|
| Total Revenue | $9.2 billion | $8.3 billion | $27.0 billion | $24.1 billion |
| Net Income | $1.2 billion | $1.0 billion | $3.5 billion | $3.1 billion |
| EBIT | $1.5 billion | $1.4 billion | $4.5 billion | $4.0 billion |
| Free Cash Flow | $2.4 billion | $1.8 billion | $2.4 billion | $1.8 billion |
Segment Performance
Schlumberger's revenue is segmented into four main categories: Digital & Integration, Reservoir Performance, Well Construction, and Production Systems. In 2024, the Digital & Integration segment generated $3.1 billion, reflecting a 10% increase year-over-year, driven by the growing demand for its cloud and AI-based services. Reservoir Performance revenue was $5.4 billion, up 11%, primarily due to increased activity in stimulation and intervention services.
| Segment Revenue | Q3 2024 | 9M 2024 |
|---|---|---|
| Digital & Integration | $1.1 billion | $3.1 billion |
| Reservoir Performance | $1.8 billion | $5.4 billion |
| Well Construction | $3.3 billion | $10.1 billion |
| Production Systems | $3.1 billion | $8.9 billion |
Market Position and Future Outlook
Schlumberger's strategic focus on digital transformation and operational efficiencies has positioned it to capitalize on emerging market opportunities. The company has a total backlog of $5.2 billion as of September 30, 2024, indicating strong future revenue potential. Additionally, the firm is committed to returning value to shareholders, having increased its quarterly dividend to $0.275 per share, up from $0.25 in early 2024.
As the energy sector evolves, Schlumberger aims to leverage its technological advancements and global footprint to maintain its leadership position in oilfield services.
A Who Owns Schlumberger Limited (SLB)
Major Shareholders
As of 2024, Schlumberger Limited (SLB) has a diverse ownership structure. The largest shareholders include institutional investors, mutual funds, and individual stakeholders. The top institutional investors are as follows:
| Institution | Shares Owned | Ownership Percentage |
|---|---|---|
| The Vanguard Group, Inc. | 8.5 million | 6.0% |
| BlackRock, Inc. | 7.8 million | 5.5% |
| State Street Corporation | 6.1 million | 4.3% |
| Wellington Management Group LLP | 5.9 million | 4.2% |
| Invesco Ltd. | 4.2 million | 3.0% |
Insider Ownership
Insider ownership is a crucial aspect of Schlumberger's equity structure. Key executives and board members hold significant shares:
| Name | Position | Shares Owned |
|---|---|---|
| Olivier Le Peuch | CEO | 1.2 million |
| Simon Ayat | CFO | 0.9 million |
| Patricia L. Hatter | Board Member | 0.5 million |
| R. Scott Rowe | Board Member | 0.4 million |
Recent Shareholder Activities
As of September 30, 2024, SLB has been engaged in a significant share repurchase program, reflecting a commitment to returning value to shareholders. The cumulative repurchase under this program is approximately:
| Time Period | Total Cost (in millions) | Total Shares Purchased (in millions) | Average Price Paid per Share |
|---|---|---|---|
| 2024 (YTD) | $1,236 | 26.6 | $46.47 |
| 2023 | $594 | 11.5 | $51.66 |
Dividend Information
In January 2024, Schlumberger announced a 10% increase in its quarterly cash dividend, raising it from $0.25 to $0.275 per share. Dividends paid during the first nine months of 2024 and 2023 were:
| Year | Dividends Paid (in millions) |
|---|---|
| 2024 | $1,144 |
| 2023 | $961 |
Market Performance
As of September 30, 2024, SLB's stock performance has shown resilience in the market, with significant activity noted in its revenue and earnings:
| Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Total Revenue (in millions) | $9,159 | $8,310 |
| Net Income (attributable to SLB) (in millions) | $1,186 | $1,123 |
| Earnings per Share (EPS) | $0.83 | $0.78 |
Conclusion
Schlumberger Limited's ownership structure as of 2024 illustrates a balanced mix of institutional and insider ownership, alongside active shareholder engagement through repurchase and dividend initiatives. The company's financial metrics reflect a positive trajectory in revenue and profitability, indicating strong market positioning.
Schlumberger Limited (SLB) Mission Statement
Overview of Mission Statement
Schlumberger Limited’s mission statement emphasizes its commitment to providing technology and services that enhance the performance of its customers in the oil and gas industry. The company aims to drive innovation through its advanced digital solutions and operational expertise.
Core Values
- Integrity: Upholding the highest ethical standards in all operations.
- Innovation: Continuously developing new technologies to improve efficiency.
- Performance: Delivering high-quality services that meet customer expectations.
- Collaboration: Building relationships with stakeholders to achieve mutual success.
Financial Highlights (2024)
As of September 30, 2024, Schlumberger reported significant financial metrics that reflect its operational performance:
| Metric | Q3 2024 | Q3 2023 | Nine Months 2024 | Nine Months 2023 |
|---|---|---|---|---|
| Revenue (in millions) | $9,159 | $8,310 | $27,005 | $24,145 |
| Net Income (in millions) | $1,218 | $1,136 | $3,461 | $3,127 |
| Earnings per Share (EPS) | $0.83 | $0.78 | $2.34 | $2.14 |
| Dividends Paid (in millions) | $1,176 | N/A | $3,366 | $3,091 |
| Cash and Short-term Investments (in millions) | $3,086 | $2,488 | $3,086 | $2,488 |
Investment and Growth Strategy
Schlumberger is focused on strategic investments to enhance its technological capabilities and expand its service offerings. The company anticipates capital investments of approximately $2.6 billion for the full year 2024, consistent with 2023 levels.
Shareholder Returns
In January 2024, Schlumberger announced a 10% increase in its quarterly cash dividend, raising it from $0.25 to $0.275 per share, effective April 2024. The company also repurchased approximately $1.236 billion of its common stock during the first nine months of 2024.
Recent Joint Ventures and Acquisitions
In 2024, Schlumberger formed a joint venture with Aker Carbon Capture ASA, known as SLB Capturi™, aimed at advancing carbon capture technologies. The initial investment was NOK 4.1 billion ($0.4 billion) for an 80% stake in Aker Carbon Capture Holdings AS.
Geographic Revenue Breakdown
Revenue distribution across different regions highlights the company's global presence:
| Region | Q3 2024 Revenue (in millions) | Q3 2023 Revenue (in millions) |
|---|---|---|
| North America | $1,687 | $1,643 |
| Latin America | $1,689 | $1,681 |
| Europe & Africa | $2,434 | $2,091 |
| Middle East & Asia | $3,302 | $2,842 |
Future Outlook
Schlumberger continues to position itself for future growth by enhancing its technological capabilities and focusing on sustainable energy solutions. The company’s strategic initiatives aim to meet the evolving needs of its customers while delivering strong returns to shareholders.
How Schlumberger Limited (SLB) Works
Business Segments
Schlumberger operates through multiple segments, each contributing to its overall revenue and operational efficiency:
- Digital & Integration
- Reservoir Performance
- Well Construction
- Production Systems
Financial Performance Overview
For the nine months ended September 30, 2024, Schlumberger reported total revenue of $27.0 billion, a 12% increase year-over-year compared to $24.1 billion in the same period of 2023. The revenue breakdown by segment is as follows:
| Segment | Revenue (2024) | Revenue (2023) |
|---|---|---|
| Digital & Integration | $3,091 million | $2,822 million |
| Reservoir Performance | $5,368 million | $4,826 million |
| Well Construction | $10,090 million | $10,052 million |
| Production Systems | $8,946 million | $6,888 million |
| Eliminations & Other | $(490) million | $(443) million |
Geographical Revenue Distribution
The revenue generated by geographical area for the third quarter of 2024 is detailed below:
| Region | Revenue (Q3 2024) | Revenue (Q3 2023) |
|---|---|---|
| North America | $1,687 million | $1,643 million |
| Latin America | $1,689 million | $1,681 million |
| Europe & Africa | $2,434 million | $2,091 million |
| Middle East & Asia | $3,302 million | $2,842 million |
| Other | $47 million | $53 million |
Net Income and Earnings Per Share
Schlumberger's net income attributable to the company for the nine months ended September 30, 2024, was $3,366 million, resulting in a diluted earnings per share of $2.34. This represents an increase compared to a net income of $3,091 million and diluted earnings per share of $2.14 for the same period in 2023.
Capital Investments and Dividends
Capital investments for the first nine months of 2024 were $1.9 billion, matching the same figure for 2023. The total expected capital investments for the full year 2024 are approximately $2.6 billion.
As of January 2024, Schlumberger announced a 10% increase in its quarterly cash dividend, raising it from $0.25 to $0.275 per share.
Share Repurchase Program
Schlumberger has repurchased approximately $3.0 billion of its common stock under its $10 billion share repurchase program. The table below summarizes the activity under this program:
| Period | Total Cost (in millions) | Total Shares Purchased (in millions) | Average Price per Share |
|---|---|---|---|
| Nine months ended September 30, 2024 | $1,236 | 26.6 | $46.47 |
| Nine months ended September 30, 2023 | $594 | 11.5 | $51.66 |
Debt and Liquidity
As of September 30, 2024, Schlumberger reported long-term debt of $11.864 billion. The company maintains a robust liquidity position with cash and short-term investments totaling $4.462 billion.
The net debt position stood at $(8.461 billion), reflecting cash and investments available to offset long-term obligations.
Research and Development Expenses
Research and engineering expenses for the third quarter of 2024 totaled $187 million, while general and administrative expenses were $90 million.
Operational Highlights
In 2024, Schlumberger has emphasized cost optimization and the adoption of digital solutions, contributing to its earnings growth and margin expansion despite challenges in short-cycle activity growth.
How Schlumberger Limited (SLB) Makes Money
Revenue Segmentation
Schlumberger generates revenue through four primary business segments: Digital & Integration, Reservoir Performance, Well Construction, and Production Systems. For the nine months ended September 30, 2024, revenue from these segments is as follows:
| Segment | Revenue (in millions) | Income Before Taxes (in millions) |
|---|---|---|
| Digital & Integration | $3,091 | $965 |
| Reservoir Performance | $5,368 | $1,082 |
| Well Construction | $10,090 | $2,145 |
| Production Systems | $8,946 | $1,392 |
| Eliminations & Other | ($490) | ($180) |
Digital & Integration
In 2024, Digital & Integration revenue was $3.1 billion, marking a 10% increase year-on-year. This growth is driven by higher adoption of cloud, AI, and edge technology solutions. The pretax operating margin for this segment stands at 31%, although it declined by 69 basis points compared to the previous year due to increased costs associated with Asset Performance Solutions (APS).
Reservoir Performance
Reservoir Performance generated $5.4 billion in revenue for the nine months ended September 30, 2024, an increase of 11% year-on-year. Approximately 75% of this growth originated from the Middle East & Asia. The segment's pretax operating margin is 20%, an increase of 167 basis points year-on-year, reflecting improved pricing and higher activity levels.
Well Construction
Revenue from Well Construction was $10.1 billion, essentially flat year-on-year. International revenue grew by 5%, mainly in the Middle East & Asia, while North America saw a 15% reduction in revenue due to lower drilling activity. The pretax operating margin for this segment is 21%.
Production Systems
Production Systems revenue reached $8.9 billion, representing a 30% increase year-on-year, largely due to the acquisition of the Aker subsea business. Excluding this acquisition, the revenue grew by 8%. The pretax operating margin improved to 16%, an increase of 391 basis points, driven by execution efficiency and improved pricing.
Geographic Revenue Distribution
Revenue by geographic area for the nine months ended September 30, 2024, is as follows:
| Region | Revenue (in millions) |
|---|---|
| North America | $4,929 |
| Latin America | $5,084 |
| Europe & Africa | $7,199 |
| Middle East & Asia | $9,650 |
| Other | $143 |
Financial Performance
For the nine months ended September 30, 2024, Schlumberger reported a total revenue of $27.0 billion, reflecting a 12% increase year-on-year. Net income attributable to SLB for this period was $3.4 billion, with earnings per share at $2.36.
Cash Flow and Capital Management
Net cash provided by operating activities was $4.2 billion for the nine months ended September 30, 2024. Capital investments, including capital expenditures and APS investments, totaled $1.9 billion during the same period. SLB plans to maintain capital investments at approximately $2.6 billion for the full year 2024.
Shareholder Returns
In January 2024, Schlumberger announced a 10% increase in its quarterly cash dividend from $0.25 to $0.275 per share, effective April 2024. Dividends paid during the first nine months of 2024 totaled $1.1 billion, compared to $961 million during the same period in 2023.
Stock Buyback Program
As of September 30, 2024, Schlumberger has repurchased approximately $3.0 billion in shares under its $10 billion share repurchase program. The total cost and average price per share for the nine months ended September 30, 2024, is summarized below:
| Total Cost (in millions) | Total Shares Purchased (in millions) | Average Price per Share |
|---|---|---|
| $1,236 | 26.6 | $46.47 |
Debt Management
As of September 30, 2024, Schlumberger's long-term debt stood at $11.9 billion, with a net debt of $(8.5) billion, reflecting cash and short-term investments exceeding total debt. Interest expense for the first nine months of 2024 was $370 million.
Market Position and Strategic Initiatives
SLB is strategically positioned to capture growth in long-cycle projects, particularly in deepwater and gas markets. The company continues to focus on cost optimization and the adoption of digital technologies to enhance operational efficiency and profitability.
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Article updated on 8 Nov 2024
Resources:
- Schlumberger Limited (SLB) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Schlumberger Limited (SLB)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Schlumberger Limited (SLB)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.