Oil and gas industry weather vane Schlumberger (SLB.US) Q3 revenue falls short of expectations, warns that oil exploration companies are slowing down spending

The Zhitong Finance App learned that before the US stock market on October 18 (Friday), oil service giant SLB.US (SLB.US) announced results for the third quarter of 2024. According to the data, the company's Q3 revenue was $9.16 billion, up 10.2% year over year, falling short of market expectations; non-GAAP earnings per share were $0.89, better than market expectations of $0.88.

Adjusted EBITDA was US$2.34 billion, up 2% month-on-month and 13% year-on-year. The adjusted EBITDA margin was 25.6%, up 55 basis points from month to month. Cash flow from operating activities was $2.45 billion and free cash flow was $18.01 billion.

Schlumberger warned that oil explorers' spending growth has slowed in the past few months due to falling commodity prices leading customers to take a cautious approach.

Olivier Le Peuch, CEO of Schlumberger, said in a statement: “Despite some customers being more cautious about recent capital expenditure and discretionary spending due to lower commodity prices, most projects are continuing as planned.” “Although the growth rate of upstream spending has slowed in the past few months due to the impact of the macro environment, we still expect upstream investment to remain at a sustained level in the next few years.”

Schlumberger is often a weather vane for the oil and gas industry, and its global operations provide insight into the financial state of the energy industry. It was the first of the three major oilfield contractors to report third-quarter results, and rivals Baker Hughes and Halliburton are planning to report results in the next few weeks.

Due to industry consolidation, low gas prices, and pressure to keep expenses low and return profits to shareholders, US shale activity has slowed, and major oil field service companies are turning to international and offshore oil fields to do more business. According to Evercore ISI, international spending by oil exploration companies is expected to increase by 5% this year, while the US and Canada will fall by 3%.