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SLB (NYSE:SLB), formerly Schlumberger, reported its fourth quarter 2024 earnings showing adjusted earnings per share (EPS) of $0.92, topping consensus of $0.90. Revenues also hit $9.28 billion, higher than analysts' estimate of $9.18 billion. And cited from Investing, for full-year 2024 revenue grew by 10% year-over-year to 36.3 billion.
After reporting earnings, SLB raised its quarterly dividend by 3.6% and triggered an $2.3 billion share repurchase program with an intention of returning a minimum $4 billion to shareholders by 2025. Shares in the company also rose about 7.65 percent in today's trading session.
The changing energy demand for clean power will require traditional oil and gas companies like SLB to adapt, and the ability to adjust to the dynamic demand will project the future of the company and determine if the company can keep delivering favorable earnings results.
SLB CEO Olivier Le Peuch on earnings call said, "Our 2024 results underscore the strength of Schlumberger's diverse portfolio to navigate evolving market dynamics."
SLB is transitioning itself since 2020 to fit in the renewable energy future by exploring opportunities in low-carbon and carbon-neutral technologies, including initiatives in carbon capture, energy storage, geothermal and so on with its ventures such as SLB New Energy, Genvia and Neolith Energy. But as of today, most of its revenue still come from business segments that still tied to traditional oil and gas.
Well Construction segment makes 40.7% of its total revenue, and it's related to services related to drilling and well completion in oil and gas operations. And the second largest revenue contributor, Production Systems that makes 29.7%, is a business segment that optimize production from oil and gas wells. While Digital & Integration and Reservoir Performance can bridge both traditional and renewable energy sectors.
Digital & Integration services from SLB provides data analytics, automation, and digital transformation services, and the revenue from this segment increases significantly 20% year-over-year. SLB braces itself up to the market dynamic.
This article first appeared on GuruFocus.