SLB expects Data Center Solutions to exceed a $1 billion annualized revenue run rate by the end of 2026.
The company expects Data Center Solutions to surpass a $2 billion annualized revenue run rate by the end of 2027.
SLB says the timing of a full Middle East recovery remains uncertain due to regional conflict.
Overview
Oilfield services provider's Q2 revenue rose 5% year over year, beating analyst expectations.
Adjusted EPS for Q2 beat consensus; growth was driven by Production Systems and Digital divisions.
The company repurchased 12 million shares for $648 million and completed the Tachyus Corp acquisition.
Result drivers
Production Systems growth — Sequential revenue growth in Production Systems was supported by strong demand for artificial lift, valves, surface production systems and production chemicals, as well as increased subsea activity and the contribution from the ChampionX acquisition.
Digital division expansion — Digital revenue increased 9% sequentially, driven by strong growth in Digital Exploration, Platforms & Applications, and Digital Operations, with higher sales of exploration data licenses and transfer fees in Brazil and Indonesia.
Middle East disruptions — Revenue in the Middle East declined due to lower activity levels and operational disruptions related to regional conflict, partially offset by growth in other regions.
The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 25 "strong buy" or "buy", 3 "hold" and 2 "sell" or "strong sell".
The average consensus recommendation for the oil-related services and equipment peer group is "buy".
Wall Street's median 12-month price target for SLB NV is $62.00, about 31.3% above its July 23 closing price of $47.22.
The stock recently traded at 16 times the next 12-month earnings versus a P/E of 17 three months ago.
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