SLB Jumps 6% on Earnings Beat, AI Growth; Lifts Oil Sector as S&P 500 Energy Stocks Rally

SLB Surges on Earnings Beat, Dividend Hike, and Share Repurchase Plan

SLB shares climbed sharply after Friday’s market open, rising $2.50, or 6.08%, to $43.57, breaking above its 50-day moving average of $41.10, now a new support level. The rally followed a strong quarterly earnings report, dividend hike, and a major share repurchase announcement. Analysts are eyeing the 200-day moving average at $44.52 as the next resistance level, a mark not sustained since mid-2023.

What Drove SLB’s Strong Performance?

SLB, formerly Schlumberger, delivered Q4 earnings per share of $0.92 on revenue of $9.28 billion, beating analyst estimates of $0.90 per share and $9.18 billion in revenue. Quarterly revenue grew 3%, while EPS rose 7%. For 2024, revenue increased 10% to $36.29 billion, with annual profit up 14% to $3.41 per share.

Key drivers included a 20% revenue boost in its digital services segment and 9% growth in its reservoir performance segment, offsetting a 1% decline in well construction revenue. CEO Olivier Le Peuch highlighted robust demand in digital products and maximized recovery efforts from existing assets, particularly in the Middle East, Asia, Europe, and Africa.

SLB also announced a 3.6% dividend increase to $0.285 per share and a $2.3 billion accelerated share repurchase program, targeting $4 billion in shareholder returns for 2025.

How Is SLB Leveraging AI and Strategic Partnerships?

The company underscored artificial intelligence as a key growth area, bolstered by partnerships with Nvidia, Amazon Web Services, and Aramco. Le Peuch described AI as a transformative force for the oilfield services industry, driving sustained outperformance for customers and shareholders.

SLB’s digital strategy, including AI and cloud-based platforms, positions the company as a leader in technology-driven solutions amid a challenging oil market.

What Is the Broader Market Context?

U.S. oil prices held near $79 per barrel, their highest level since July, supporting SLB’s outlook for international market spending growth in 2025. However, the company warned of flat to slightly declining North American spending and muted revenue growth due to cautious customer budgets and reduced discretionary spending.

International natural gas projects, particularly in Asia, the Middle East, and the North Sea, remain a bright spot, while North American activity is constrained by lower drilling rates.

What’s Next for SLB?

SLB’s stock is set to test the 200-day moving average at $44.52, with further upside dependent on global energy trends and AI-driven growth in its digital services segment. Traders will focus on upcoming earnings reports from peers and fluctuations in oil and natural gas prices for further cues.

Looking ahead, the company’s cost-cutting measures, shareholder-friendly initiatives, and international expansion plans will remain in focus as it navigates mixed sector headwinds.

More Information in our Economic Calendar.