SLB beats estimates as North America supports Middle East recovery

By Priya Raman

SLB generated $9.45 billion in revenue for the three months ended Sept. 30, above the $9.28 billion estimate, as resilient North American drilling helped the oilfield-services company beat Wall Street expectations. Adjusted profit per share, a company-adjusted earnings measure, was 64 cents, ahead of the 62-cent consensus compiled by LSEG.

What drove the earnings beat?

North American quarterly revenue rose 24% to $2.40 billion. SLB attributed the increase to strength in U.S. oil and gas drilling activity.

That performance gave SLB a stable base while Middle East customers delayed project decisions and interrupted operations amid repeated conflict flare-ups across the region. The reported figures do not separate pricing, volume and margin effects, so the 24% revenue gain cannot be read as a 24% improvement in operating profit.

Takeaway: U.S. drilling supplied the immediate lift, while overseas execution remained less certain.

How much of the Middle East rebound is real?

Combined Middle East and Asia revenue rose 9% from the previous quarter to $2.81 billion, but remained 6% below the year-earlier level. The Middle East is SLB’s biggest market, accounting for 34% of total revenue in 2025. That combination describes recovery from a disrupted base, not a full return to prior-year activity.

The U.S.-Iran conflict entered its eighth month, and repeated flare-ups pressured oilfield-services companies with substantial regional exposure. Customers delayed project decisions, and ongoing operations suffered interruptions. SLB reported improving activity in Iraq, Kuwait, Oman, Saudi Arabia, Qatar and the United Arab Emirates. Yet certain countries faced renewed disruptions during the quarter’s final weeks.

Baker Hughes data cited by Reuters showed the regional total rig count rising 4% from the previous quarter to 504. The international rig count rose to 1,107 from 1,056. Rig counts indicate likely future drilling and output activity. The two counts measure activity, not completed output, and the data provides no basin-level breakdown.

Takeaway: The regional rebound is measurable, but its year-on-year decline and late-quarter stoppages show that it is not secure.

What supports SLB’s 2027 promise?

CEO Olivier Le Peuch said in the company statement: “Combined with significant activity increases in Venezuela and expanding momentum across our Core, Digital and Data Center Solutions businesses, we see a very compelling outlook for 2027, with further upside as Middle East activity recovers.” The quote groups its 2027 case around Venezuelan activity and three named business groups, but it supplies no numerical bridge.

In August, Reuters reported that SLB and Venezuela’s state-run oil company PDVSA had signed a contract granting SLB access to the country’s oilfield data. Reuters described Venezuela as the country with the world’s largest crude reserves. The agreement concerns data access, not a disclosed drilling program, production increment or reserve booking. That distinction matters because data access can improve service decisions without adding barrels on a specified timetable.

SLB also acquired cooling-equipment maker Kelvion for $4.1 billion in August. The deal expands its data-center business amid what Reuters described as an AI-driven boom in demand for power and cooling infrastructure. The purchase gives SLB an owned cooling-equipment platform, but neither deal carries a disclosed revenue schedule in the reported results. No appraisal-stage prospect, upstream sanction or final investment decision appears in the reported 2027 case.

Takeaway: SLB names identifiable growth drivers, but management has not put dates or financial targets around the promise.

What should readers watch?

The first watch item is whether delayed Middle East project decisions restart and whether regional activity survives renewed disruptions. A second is whether Middle East and Asia revenue can erase its 6% year-on-year decline. A durable signal would combine restarted project decisions with rising rig counts, rather than either measure alone.

The Baker Hughes international count of 1,107 rigs provides a near-term activity reference, not proof of future production. The reported results supply no cost or pricing detail, so the financial margin behind the 2027 promise cannot be tested from the results. The reported results also contain no permit, startup or project schedule for the Middle East recovery.

Takeaway: The watch item is the upside margin: restored project decisions and sustained rig additions must arrive before another quarter of disruptions pushes the promised recovery further out.