The world’s biggest oilfield services provider, SLB (NYSE: SLB), flagged heightened uncertainties about upstream oil and gas investment amid fears of economic slowdown, fluctuating oil prices, and unknown tariff talks outcomes and impacts.
SLB reported on Friday earnings per share (EPS) of 0.72 for the first quarter, which it described as “subdued”, and flagged potential changes in the industry’s appetite for upstream investment going forward.
SLB’s first-quarter earnings fell by 4% from the same period last year, declined by 22% compared to the fourth quarter of 2024, and slightly missed the $0.73 EPS analyst consensus forecast compiled by The Wall Street Journal.
SLB’s stock was down by 2.5% in pre-market trading in New York after the results release and the yet another warning from a major oilfield services provider that economic and trade headwinds could dampen demand for oil drilling services.
“The industry may experience a potential shift of priorities driven by changes in the global economy, fluctuating commodity prices and evolving tariffs — all of which could impact upstream oil and gas investment and, in turn, affect demand for our products and services,” SLB chief executive Olivier Le Peuch said in a statement.
“In this uncertain environment, we remain committed to protecting our margins, generating strong cash flow and delivering consistent value to our customers and shareholders in 2025,” the executive added.
Earlier this week, Halliburton, the oilfield services provider with the highest exposure to the U.S. fracking market, warned investors that its U.S. customers are re-evaluating drilling activity plans for 2025.
Baker Hughes also said it is going to be cautious about its financial performance outlook this year, due to “broader macro and trade policy uncertainty,” most likely meaning tariffs.
The market is closely watching the earnings and analyst calls of the Big Three oilfield services groups for clues about where North America drilling is heading amid uncertainties about the economy and whether oil producers would be willing to keep drilling activity levels as U.S. benchmark oil prices fell into the low $60s per barrel.
By Charles Kennedy for Oilprice.com
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