(Reuters) – SLB beat expectations for second-quarter profit on Friday, as resilient demand across key markets helped the top U.S. oilfield services firm ride out weakness in the Middle East due to the Iran war, sending its shares up 2% before the bell.
Frequent flare-ups in the war, now in its fifth month, have kept a crucial oil-producing region on edge, with Iran now seeking to shut the Bab el-Mandeb gateway to the Red Sea after choking off shipping through the Strait of Hormuz.
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The Middle East is SLB’s biggest market, accounting for 34% of total revenue in 2025, and the company had warned of a 6 to 8 cents per share hit in the second quarter due to the disruptions.
Revenue from the Middle East and Asia dropped 14% to $2.57 billion during the quarter, driven by lower activity and operational disruptions associated with the conflict.
“While activity began to recover in certain countries during the second quarter, the timing of a full recovery remains uncertain and will depend on a durable resolution of the conflict,” CEO Olivier Le Peuch said, adding a return to full production capacity is expected to take time.
Still, total revenue during the quarter climbed to $8.97 billion, driven by a 36% jump in North America.
Growth in the region was supported by higher offshore activity, a rebound in U.S. shale oil and gas drilling activity, as well as strong demand for production and recovery solutions, the company said.
Earlier this week, rival Halliburton, which also beat expectations for quarterly profit, said activity in North America will continue to recover with more rigs being added and previously idle equipment put back to work.
The North American oil and gas rig count was 704 during the second quarter, compared with 699 during the same period a year earlier, according to a survey by Baker Hughes.
SLB posted an adjusted profit of 55 cents per share for the three months ended June 30, compared with analysts’ estimate of 51 cents, according to data compiled by LSEG.
Reporting by Vallari Srivastava in Bengaluru; Editing by Sriraj Kalluvila
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