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Research Alert: Slb Q1 Results In-line, But Middle East Headwinds Weigh On Outlook

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CFRA, an independent research provider, has providedwith the following research alert. Analysts at CFRA have summarized their opinion as follows:

SLB's Q1 adjusted EPS of $0.52 matched consensus but declined from $0.72 in the prior year, while revenues advanced 3% to $8.72B, although organic revenues fell 7%. The ChampionX acquisition contributed $838M in revenues and strengthened SLB's position in production chemicals and artificial lift, with Production Systems revenue rising 23% to $3.51B; however, excluding ChampionX this segment would have declined 6%. SLB expects a broad-based oilfield recovery in 2027-2028, conditional on no prolonged Middle East conflict or economic slowdown. The adjusted EBITDA margin compressed 360 bps to 20.3% from 23.8% in the prior year, with the Middle East/Asia revenue share dropping to 31% from 35% and regional revenues declining 10% due to operational disruptions from the conflict. We think the recovery timeline is somewhat optimistic, but we agree 2026 will be challenging for oilfield services, especially in the Middle East, although Latin America remains strong at 17.5% of total revenues.

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