SLB beats estimates on international growth, raises dividend
Oilfield services giant targets $4 billion in 2026 shareholder returns as international markets drive expansion
Schlumberger delivered stronger-than-expected fourth-quarter earnings and committed to returning more than $4 billion to shareholders in 2026, bolstering confidence in the oilfield services company's international growth strategy.
The world's largest oilfield services provider reported adjusted earnings per share of $0.78 for the quarter ended December 31, 2025, beating the consensus estimate of $0.74. Revenue climbed 5.1% year-over-year to $9.75 billion, exceeding analyst forecasts of $9.55 billion.
The results underscore SLB's strategic pivot toward international and offshore markets, which now account for more than three-quarters of the company's revenue. This geographic diversification has helped offset softening conditions in North America and other mature markets, positioning the company to capitalize on a broader global upcycle in exploration and production spending.
"We're seeing a global upcycle for E&P spending, especially internationally and offshore, that is expected to accelerate into 2026," analysts at S&P Global noted in a recent sector report, highlighting SLB's competitive advantage in these markets.
Despite the adjusted earnings beat, GAAP net income declined 25% to $824 million, or $0.55 per share, compared with $1.1 billion, or $0.77 per share, in the year-earlier quarter. Adjusted EBITDA slipped 2% to $2.33 billion, reflecting what the company described as operational challenges and project timing issues in certain regions.
The board of directors moved to reward shareholders with a 3.5% dividend increase, raising the quarterly payout to $0.295 per share from $0.285. The new dividend will be payable on April 2 to shareholders of record as of February 11.
More significantly, SLB established a target of returning over $4 billion to shareholders in 2026 through a combination of dividends and share repurchases. The commitment reflects confidence in the company's cash flow generation capabilities as it benefits from strong international activity levels and improving project execution.
Analysts have responded positively to the earnings beat and shareholder return commitment. Stifel maintained its "Buy" rating and raised its price target from $48 to $52 on January 21, while Susquehanna reiterated a "Positive" rating and increased its target to $52 from $42 earlier this month. The consensus analyst rating stands at "Buy" with an average price target of $51.46, according to data from 32 analysts covering the stock.
SLB shares, which had rallied heading into the earnings release, traded down 0.35% at $49.15 in pre-market action Friday. The stock has gained nearly 63% over the past 12 months and is approaching its 52-week high of $49.58.
The broader oilfield services sector is projected to grow from $203.66 billion in 2025 to $215.01 billion in 2026, representing a compound annual growth rate of 5.6%, according to industry research from The Business Research Company. This expansion is being driven by rising global energy demand, increasing onshore project activity, and advancements in drilling technologies.
SLB's international focus positions it particularly well to benefit from spending growth in the Middle East, where the company is seeing strong demand from national oil companies expanding production capacity. The company has noted sustained investment in Saudi Arabia, the United Arab Emirates, Qatar and Egypt, with new unconventional gas activities in the UAE driving sequential revenue growth in the most recent quarter.
However, the outlook is not without challenges. The International Energy Agency forecasts that Brent crude oil prices could average $56 per barrel in 2026 as global production potentially exceeds demand, which could discourage some producers from increasing output. Additionally, U.S. crude production is expected to decrease slightly next year, potentially limiting growth opportunities in North America.
SLB has also acknowledged industry-wide headwinds including economic uncertainty, volatile oil prices and rising tariff risks that could affect customer spending decisions. During recent periods, the company faced challenges including a sharper-than-expected slowdown in Mexico, a slow start in Saudi Arabia and offshore Africa, and a substantial decline in Russia following geopolitical developments.
Looking ahead, investors will be focused on management's commentary during the company's earnings conference call, scheduled for 9:30 AM Eastern Time, regarding the sustainability of international growth, margin trends, and the specifics of the $4 billion shareholder return commitment. CEO Olivier Le Peuch and CFO Stéphane Biguet are expected to provide more detailed guidance for 2026.
The company's ability to maintain strong international activity levels while navigating a complex geopolitical landscape will be crucial to delivering on its shareholder return promises and supporting further stock price appreciation. With its extensive global footprint and technological capabilities, SLB remains well-positioned as what analysts describe as a "global energy infrastructure facilitator" in what is shaping up to be a pivotal year for the sector.