SLB Q3 Earnings Beat Estimates on Digital Segment Growth, Revenues Miss

SLB SLB has reported third-quarter 2025 earnings of 69 cents per share (excluding charges and credits), which beat the Zacks Consensus Estimate of 66 cents. The bottom line, however, decreased from the year-ago quarter’s level of 89 cents.

The oilfield services giant recorded total quarterly revenues of $8,928 million, which missed the Zacks Consensus Estimate of $8,930 billion. The top line declined from the year-ago quarter’s figure of $9,159 million.

The better-than-expected quarterly earnings were primarily driven by growth in the Digital segment and two months of contribution from the ChampionX acquisition.

SLB Limited Price, Consensus and EPS Surprise

SLB Limited price-consensus-eps-surprise-chart | SLB Limited Quote

Segmental Performance

Revenues in the Digital unit totaled $658 million, up 3% from the year-ago quarter’s level. Pre-tax operating income of $187 million was down from $190 million a year ago. The unit's revenues increased year over year, primarily due to growth in the Digital Operations revenue and higher revenues from Platforms & Applications. The Digital segment’s revenues include the impact of two months of activity from ChampionX.

Revenues in the Reservoir Performance unit decreased 8% year over year to $1.68 billion. Pre-tax operating income totaled $312 million, which declined 15% year over year. The figure beat the Zacks Consensus Estimate of $295 million. The revenues were affected due to diminished intervention and stimulation activity in Saudi Arabia and activity declines in Mexico also contributed to the same.

The Well Construction segment’s revenues fell 10% from the year-earlier quarter’s level to $2.97 billion. Pre-tax operating income decreased 22% to $558 million and the Zacks Consensus Estimate for the same was pegged at $525 million. The decline was due to a wider reduction in drilling activities across Mexico, Saudi Arabia, Namibia, North America and Asia. However, higher revenues from North America and offshore Guyana partially offset the decline.

Revenues in the Production Systems segment amounted to $3.47 billion, up from $3.04 billion a year ago. Pre-tax operating income improved 8% year over year to $559 million, which missed the Zacks Consensus Estimate of $565 million. The segment benefited from two months of contribution from the ChampionX production chemicals and artificial lift businesses, partially offset by an unfavorable geographic mix affecting surface production systems and completions.

Cash Flow & Financials

SLB reported a free cash flow of $1.1 billion in the third quarter.

As of Sep. 30, 2025, the company had approximately $3.59 billion in cash and short-term investments. It registered a long-term debt of $10.84 billion at the end of the quarter.

Outlook

SLB reiterated its full-year 2025 capital investment (including capex, exploration data costs and APS investments) guidance is approximately $2.4 billion, including the impact of the ChampionX acquisition. The projected figure is lower than the 2024 level of $2.6 billion.

SLB’s Zacks Rank and Key Picks

SLB currently carries a Zacks Rank #4 (Sell).

Some better-ranked stocks from the energy sector are Cheniere Energy LNG, Archrock Inc. AROC and TechnipFMC plc FTI. While Cheniere Energy sports a Zacks Rank #1 (Strong Buy) at present, Archrock and TechnipFMC carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Cheniere Energy is involved in LNG-related businesses, which include LNG terminals and natural gas marketing. The company has achieved a milestone with the first production from the first LNG train of its Corpus Christi Stage 3 Liquefaction Project. The project, which includes seven midscale LNG trains, aims to expand the production capacity of the Corpus Christi Liquefaction facility. This expansion is expected to enhance Cheniere's position in the rapidly growing global LNG market, enabling it to meet the rising demand for LNG both in the United States and internationally.

Archrock is an energy infrastructure company based in the United States with a focus on midstream natural gas compression. It provides natural gas contract compression services and generates stable fee-based revenues. With natural gas playing an increasingly important role in the energy transition journey, AROC is expected to witness sustained demand for its services.

TechnipFMC plc is a leading manufacturer and supplier of products, services and fully integrated technology solutions for the energy industry. FTI’s project backlog, now at $15.8 billion, has grown sequentially in six of the last seven quarters, reinforcing long-term revenue visibility for the company.

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This article originally published on Zacks Investment Research (zacks.com).

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