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Schlumberger Pops 8.5% on Q2 Beat; Updates Outlook

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Schlumberger posted solid second-quarter results, exceeding both top and bottom-line expectations. The company even raised its outlook for Fiscal 2022 amid resilient global oil and gas activity growth expected in 2022 and beyond.

Shares of Schlumberger NV (NYSE: SLB) popped 8.5% on Friday after the company posted a solid beat and raised results. The oilfield services company exceeded both second-quarter revenue and earnings expectations on the heels of rising offshore drilling activities and higher production system sales in both North America and international markets.

The Board also approved a quarterly cash common dividend of $0.175 per share, reflecting a dividend yield of 1.57%. SLB stock ended the day up 4.3% at $35.07 on July 22.

Impressed with the results, Schlumberger CEO Olivier Le Peuch said, “Growth was broad-based, driven by an increase in activity internationally, in North America, and across all Divisions. The quarter was also characterized by a favorable mix of exploration and offshore activity and the increasing impact of improved pricing, resulting in the largest sequential quarterly growth since 2010.”

SLB Q2 Results in Detail

Schlumberger reported adjusted earnings of $0.50 per share, up 67% year-over-year and beating analysts’ estimates by 10 cents.

Similarly, revenue of $6.77 billion advanced 20% compared to the prior year period and also outpaced Street estimates by $490 million.

Schlumberger Raises Outlook For 2022

The company noted that the second quarter set an inflection point for drilling and completion activities with robust worldwide demand. Moreover, the company expects the momentum in the multiyear upcycle to continue with upstream activity and service pricing steadily increasing both internationally and in North America, resulting in a strengthened outlook for Schlumberger.

Based on the above, SLB raised its full-year fiscal 2022 revenue forecast to grow by the high teens, reaching at least $27 billion. Furthermore, the increased revenue is expected to boost earnings beyond the previous guide.

SLB Target Price

With 11 unanimous Buys, SLB stock commands a Strong Buy consensus rating. The average Schlumberger price target of $49.20 implies 40.3% upside potential to current levels. Meanwhile, the stock has gained 11.3% amid the war-triggered rising fuel and oil prices.

Stock Investors Are Positive about SLB

TipRanks’ Stock Investors tool shows that investor sentiment is currently Positive on Schlumberger, with 0.8% of portfolios tracked by TipRanks increasing their exposure to SLB stock over the past 30 days.

Ending Thoughts

Schlumberger is riding on waves of high oil and fuel demand. Olivier Le Peuch noted, “Despite near-term concerns over a global economic slowdown, the combination of energy security, favorable break-even prices, and the urgency to grow oil and gas production capacity is expected to continue to support strong upstream E&P spending growth.”

Moreover, retail investors and analysts are infusing optimism into SLB stock, and the high expectations for the future make for a compelling case.

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