This red hot oil services stock takes a breather, even after a big earnings beat

By Tomi Kilgore

SLB's stock is having its best month since 2022, and the company plans to boost shareholder returns to more than $4 billion

SLB's stock rallies toward a near two-year high after a big earnings beat, adding to the historic gains it has already seen this month.

An earlier report had an incorrect amount of what the company planned to spend on share repurchases. It has been corrected.

Shares of the oil services company formerly known as Schlumberger were little changed Friday, as investors appeared to use the release of fourth-quarter of earnings for investors to take a break after enjoying a historic run up this month.

SLB delivered the biggest quarterly profit and revenue beats in about three years, and boosted its dividend payout. But after the stock (SLB) had already run up nearly 30% to start the year, amid hopes that Venezuela will be a boon for companies that make oil-drilling equipment, a pullback wouldn't be such a surprise.

If there was a reason for pause, the company did say on the post-earnings call with analysts that near-term oversupply may keep putting downward pressure on commodity prices through the first half of 2026. Therefore, the company believes oil producers will "remain cautious" to start this year.

After closing Thursday at an 18-month high, the stock had run up as much as 4.8% within minutes after the opening bell, but then pulled back to be little changed in recent afternoon trading. It has soared 28.7% in January, which puts it on track for the biggest monthly gain since it rocketed a record 44.9% in October 2022 after the announcement of global production cuts.

Shares of fellow oil-services company Halliburton (HAL) have jumped 22.3% in January and the VanEck Oil Services ETF OIH has rallied 20.7%, while the S&P 500 index SPX has edged up 1.1%.

Melius Research analyst James West said SLB should be a big winner from the Trump administration's plan to rebuild Venezuela's oil industry, noting that SLB was the largest oil-services company with operations in the country.

And as SLB Chief Executive Olivier Le Peuch said on the post-earnings conference call with analysts, that the company has nearly a century of experience operating in Venezuela, and is currently the only international service company actively operating there.

"Historically, we have been on the country and we remain confident that with appropriate licensing safety parameters and compliance measures in place, we can rapidly ramp up activities in support of the oil and gas industry in Venezuela," Le Peuch said, according to an AlphaSense transcript.

Even before SLB starts reaping Venezuelan riches, which could take a while, the company was already providing a bullish backdrop for investors.

The company reported before Friday's open that fourth-quarter net income fell 24.7% from the same period a year ago to $824 million, as crude oil futures (CL00) dropped 14.3% in 2025. Adjusted earnings per share, which excludes nonrecurring items, fell to 78 cents from 92 cents, but was 5.4% above the average analyst EPS estimate compiled by FactSet of 74 cents.

Meanwhile, revenue rose 5% to $9.75 billion, or 2% above the FactSet consensus of $9.55 billion.

The margin of the EPS beat was the most since the third-quarter of 2022, and the revenue beat was the biggest since the first-quarter of 2023.

The company said it returned $4 billion to shareholders in 2025, including $1.6 billion in dividends paid and $2.4 billion in share repurchases. In 2026, returns will "exceed" $4 billion, with a split of about $1.7 billion through dividends and approximately $2.4 billion through stock buybacks.

Regarding the dividend, SLB also raised its quarterly payout by 3.5% to 29.5 cents a share. At current stock prices, the new annual dividend rate implies a dividend yield of 2.39%, which compares with the current yield on rival Halliburton's stock of 1.97% and the implied yield for the S&P 500 index SPX of 1.14%.

-Tomi Kilgore

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01-23-26 1412ET