SLB shares jumped more than 10% after the oilfield services giant beat second-quarter profit estimates and forecast fourth-quarter revenue above $10 billion, driven by energy security demand from the Middle East conflict and growth in AI-related data center solutions.
SLB shares surged more than 10% Friday after the world's largest oilfield services provider beat second-quarter profit estimates and laid out a growth trajectory powered by energy security spending and artificial intelligence infrastructure demand.
Adjusted earnings came in at 55 cents per share, topping the 51-cent consensus compiled by LSEG, as revenue rose to $8.97 billion. The company expects global third-quarter revenue to grow 3% to 4% sequentially and fourth-quarter revenue to surpass $10 billion, representing 5% year-over-year growth.
"Customers are eager to restore production," Chief Executive Officer Olivier Le Peuch said on the earnings call. He described a "gradual recovery unfolding in the third quarter" provided the Iran conflict does not escalate further.
The Middle East, which accounted for 34% of SLB's 2025 revenue, remained the biggest drag on results. Revenue from the Middle East and Asia fell 14% to $2.57 billion in the second quarter, hit by operational disruptions tied to the Iran war, including constraints in Iraq. The impact came in at the lower end of the company's 6-to-8-cents-per-share guidance, helped by temporary cost actions. Le Peuch noted activity is picking up in the UAE, Qatar and parts of Saudi Arabia, though he cautioned that "the timing of a full recovery remains uncertain and will depend on a durable resolution of the conflict."
North America and Latin America drive the quarter
Strength outside the Middle East more than offset the disruptions. North American revenue jumped 36%, while Latin America rose 15%, powered by robust upstream investment as oil prices remain range-bound. The company said it expects more contract awards in the coming weeks and months that would strengthen its market position in the Middle East.
In Venezuela, SLB has been preparing for an expected recovery in oil production, working with international oil companies on planning and resource mobilization. The company expects to enter 2027 with multiple contracts and customers as oil majors such as Chevron Corp. advance plans to ramp up production in the South American country.
AI infrastructure opens a new revenue stream
Beyond oil and gas, SLB is targeting data center solutions as a growth driver. The company said it expects the run rate for its data center business to exceed $1 billion, tapping into surging demand for power and cooling infrastructure tied to artificial intelligence. The move positions SLB alongside other energy service firms seeking to diversify into the AI economy, where electricity demand from data centers is projected to grow at an annual rate of 15% to 20% through the end of the decade.
The dual tailwinds of energy security and AI infrastructure have given SLB a differentiated growth narrative at a time when the broader oilfield services sector faces uncertainty from geopolitical disruptions. The company projected materially higher free cash flow in the second half of 2026, signaling confidence in its operational momentum.
This article is for informational purposes only and does not constitute investment advice.
