SLB beats profit estimates as strong demand offsets Iran war impact

July 24 (Reuters) - SLB beat expectations for second-quarter profit on Friday, as resilient demand across key markets helped the top oilfield services firm ride out weakness in the Middle East due to the Iran war, sending its shares up 7.2% in morning trading.

Frequent flare-ups in the war, now in its fifth month, have kept a crucial oil-producing region on edge, with Iran now seeking to shut the Bab el-Mandeb gateway to the Red Sea after choking off shipping through the Strait of Hormuz.

The Middle East is SLB's biggest market, accounting for 34% of its revenue in 2025. It had warned of a 6-8 cents per share hit in the second quarter due to the disruptions.

"This quarter marked a return to year-on-year revenue growth outside the Middle East," CEO Olivier Le Peuch said.

Revenue from Middle East and Asia dropped 14% to $2.57 billion during the quarter, driven by lower activity and operational disruptions associated with the conflict.

"While activity began to recover in certain countries during the second quarter, the timing of a full recovery remains uncertain and will depend on a durable resolution of the conflict," Le Peuch said, adding that a return to full production capacity is expected to take time.

Halliburton had also cautioned the pace of recovery in the Middle East remained dependent on day-to-day events, after the SLB rival beat expectations for quarterly profit earlier this week.

Still, total revenue during the quarter climbed to $8.97 billion, driven by a 36% jump in North America and a 15% rise in Latin America.

Growth in the region was supported by higher offshore activity, a rebound in U.S. shale oil and gas drilling activity, as well as strong demand for production and recovery solutions, the company said.