By Arathy Somasekhar and Arunima Kumar
HOUSTON (Reuters) -SLB on Friday flagged weakening North America oilfield activity even as the company topped analysts' estimates for second quarter profit, helped by a rebound in offshore and international drilling.
SLB, the largest oilfield service company and former Schlumberger (NYSE:SLB), joined rivals Halliburton (NYSE:HAL) and Baker Hughes in forecasting tepid North American activity, sending its shares down 3.3% to $55.30 in morning trading.
North America revenue for the current quarter will be slightly down, Chief Executive Olivier Le Peuch said in a post-earnings conference call with analysts, saying activity in the region was moderating.
However, the company expects third quarter revenue from international markets to grow by a mid-single digit percentage, citing a resurgence in offshore and Middle East drilling.
In comparison, last quarter's international revenue rose 21% to $6.3 billion and North America's climbed 14% to $1.75 billion.
Analysts at Tudor Pickering Holt noted that international revenue missed its estimate by $1 billion, while North America slightly topped its forecast. U.S. and Canadian producers have kept a tight rein on spending since the 2020 downturn.
SLB continues to expect year-on-year revenue growth of more than 15% and adjusted earnings before interest, tax, depreciation and amortization to rise in the mid-20s.
"The year is playing out largely how the company expected with a more muted outlook for North America and overall profit margins picking up in Q2 through pricing power, technology adoption, and strength in key international markets," said Peter McNally, an analyst at research firm Third Bridge.
The company reported net income excluding items of 72 cents per share for the three months ended June 30, compared with analysts' average estimate of 71 cents per share, according to Refinitiv data.
Revenue of $8.1 billion fell slightly below analysts' estimate of $8.2 billion.