SLB NV (NYSE:SLB) shares traded higher Friday after the oilfield services company reported second-quarter 2026 adjusted earnings and revenue above analyst expectations.
The stock’s gain reflected the quarterly beat, strong Digital growth, and improving momentum in Production Systems and Data Center Solutions.
Earnings And Margins
Adjusted EPS of 55 cents topped the 51-cent estimate, while revenue rose 5% to $8.972 billion, beating $8.672 billion.
GAAP EPS fell 30% to 52 cents, and net income declined 22% to $786 million.
Adjusted EBITDA fell 7% to $1.90 billion, with margin narrowing to 21.2%. Results included $69 million in merger and integration charges.
Segment Performance
Digital revenue rose 18% to $697 million, with pretax margin expanding to 27.8%. Annualized recurring revenue increased 15% to $1.04 billion.
Production Systems revenue climbed 29% to $3.77 billion, including $870 million from ChampionX. Excluding ChampionX, segment revenue fell 1%, and total revenue declined 5%.
ChampionX remained margin-accretive despite chemical-cost inflation.
Reservoir Performance revenue fell 8% to $1.56 billion, while Well Construction declined 7% to $2.74 billion. Pretax margins narrowed to 14.9% and 15.2%, respectively.
Data Center Solutions revenue surged 80% to $186 million. SLB expects its annualized run rate to exceed $1 billion by year-end 2026 and $2 billion exiting 2027.
Regional Results
International revenue declined 3% to $6.67 billion, while North America revenue increased 36% to $2.24 billion.
Middle East revenue fell 13% sequentially due to conflict-related disruptions. Temporary cost actions limited the related EPS impact to slightly below SLB’s previously indicated range of 6 cents to 8 cents.
Management said the timing of a full regional recovery remains uncertain, with Iraq still constrained.
Cash Flow And Returns
Operating cash flow totaled $1.36 billion, while free cash flow reached $716 million.
SLB ended the quarter with $4.07 billion in cash and short-term investments, $12.80 billion in total debt and $8.73 billion in net debt.
The company repurchased 12 million shares for $648 million and approved a quarterly dividend of 29.5 cents per share.
SLB continues to target at least $2.4 billion in 2026 buybacks and more than $4 billion in total shareholder returns. Full-year capital investment remains projected at about $2.5 billion.
Outlook And Risks
SLB expects third-quarter revenue to increase 3% to 4% sequentially, with adjusted EBITDA margin expanding about 75 basis points.
A renewed Middle East escalation could reduce third-quarter revenue by roughly $150 million and adjusted EBITDA by $75 million, primarily affecting Well Construction and Reservoir Performance.
For the fourth quarter, SLB expects revenue above $10 billion and adjusted EBITDA margin near 24%, assuming continued Middle East recovery.
Management also expects second-half free cash flow to materially exceed first-half levels, supported by higher earnings, stronger collections and lower inventories.
Energy Security Drives Fresh Oil Investment
SLB said growing concerns about energy security are driving a renewed cycle of global oil and gas investment, particularly in offshore and deepwater projects.
Management said rising exploration activity, expanding production capacity and stronger demand for long-cycle developments are supporting a more constructive outlook despite ongoing geopolitical uncertainty in the Middle East.
The company expects these trends to underpin higher international spending and contribute to stronger revenue, margins and cash flow in the second half of 2026.
SLB Stock Price Activity: SLB shares were up 9.93% at $51.91 at the time of publication on Friday, according to Benzinga Pro data.
Photo by T. Schneider via Shutterstock
