S&P 500 oilfield service giant SLB second-quarter earnings came in around analyst expectations before the stock market opened on Friday, with the company noting it has a "constructive" view for the rest of the year. Meanwhile, President Donald Trump continues to push increased U.S. oil production is a top priority for his administration.
SLB Q2 earnings fell 13% to 74 cents per share while sales declined 6.5% to $8.55 billion. The company's international revenue continued to lead the charge, hitting $6.85 billion in the second quarter with revenue in North America totaling $1.65 billion. These numbers mark an 8% decline and a 1% increase year-over-year, respectively. Analysts expected EPS of 72 cents with revenue coming in at $8.5 billion, according to FactSet.
Houston-based SLB's sales and earnings turned lower in the first quarter for the first time in almost two years and continued to dip in the second quarter. But investors and analysts were looking for commentary the oil and gas industry as a view into whether Trump's push for higher oil production is having any impact.
"The market is navigating several dynamics — including fully supplied oil markets, OPEC+ supply releases, ongoing trade negotiations and geopolitical conflicts. Despite this, commodity prices have remained range bound," SLB Chief Executive Officer Olivier Le Peuch said in the earnings release.
"Looking ahead, assuming commodity prices stay range bound, we remain constructive for the second half of the year," he added.
CFRA analyst Stewart Glickman noted Friday that SLB management "described the upstream capex environment as 'cautious,' which seems apropos given oil prices marooned in the mid-$60s range."
"We think the completed ChampionX acquisition is well-timed for a low-spend environment, providing more production and oil recovery exposure that should be attractive offerings," Glickman wrote Friday.
On Thursday, Morgan Stanley analyst Daniel Kutz reiterated a SLB price target of 45 with an overweight rating. Kutz wrote that he has a "constructive near-term view on SLB" moving into the third quarter and that the stock is "a top" 12 to 18 month play. The analyst also noted that with SLB closing its acquisition of ChampionX, SLB could now see upside.
"We see increased scope for SLB shares to outperform," Kutz wrote Thursday. "We continue to argue that SLB's diversified portfolio—which includes revenue streams from digital, new energy, data center infrastructure, O&G production (bolstered by CHX acquisition), as well as outsized exposure to international/offshore upstream markets—offers EPS & FCF durability, longevity, and idiosyncratic growth opportunities that we believe are underappreciated by the market."
S&P 500: Other Oil Sector Indicators
Meanwhile, Baker Hughes reported July 11 that the weekly U.S. rig count fell to 537 rigs, 47 rigs fewer than were in operation a year ago and the lowest level since October 2021. The count has declined for 11 straight weeks, the longest decline since July 2020, as the market descended into the Covid pandemic.
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The SLB earnings report comes as fellow S&P 500 component Kinder Morgan reported in-line second-quarter earnings and better-than-expected sales on Wednesday.
Kinder Morgan, headquartered in Houston, operates nearly 50,000 miles of pipelines and 139 storage terminals across the U.S. While the company's network transports a variety of products, it is primarily focused on natural gas, with 40% of the U.S. natural gas passing through its system at some point.
Kinder Morgan projects natural gas demand could grow 20% through 2030, led by liquefied natural gas (LNG) exports. The company's backlog in Q2 expanded to $9.3 billion, up 5.7% from Q1, and CFRA analyst Stewart Glickman wrote Thursday that he expects the completions of Permian Highway and Gulf Coast Express pipeline expansions to "enhance KMI's offerings beginning in late 2026."
S&P 500: SLB Stock And Oil Prices
SLB stock traded down 3.9% to 33.32 at the close of Friday's stock market action after gaining 0.2% to 34.67 on Thursday. The S&P 500 stock has been in a gradual decline since peaking in September, 2023.
U.S. oil prices gained ground, trading below $68 per barrel on Friday. Natural gas prices advanced about 1% to $3.58 per million British thermal units. Overall, West Texas Intermediate oil prices have declined around 7% this year. Meanwhile, U.S. natural gas prices have increased about 17%.
Despite the slowdown in U.S. production, SLB earnings land as the Organization of the Petroleum Exporting Countries, known as OPEC, continues to ramp its production higher. SLB plays a key role in this effort by the Saudi Arabi-led group to drive oil prices lower and claw back market share from competitors like Russia and the U.S. More than 80% of SLB revenue comes from outside the U.S., according to FactSet.
Meanwhile, OPEC reported earlier this week no change to the group's supply and demand outlook, with global oil demand growth this year and next at 1.29 million barrels per day and 1.28 million, respectively.
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Goldman Sachs analyst Dean Struyven on July 14 wrote that U.S. oil prices in the second half of 2025 are expected to be around $63 per barrel, up from his previous prediction of $57 per barrel. Meanwhile, Struyven sees oil prices trading around $52 per barrel in 2026 as OPEC+ continues to unwind its Covid-era oil production cuts.
For this year's stock market, SLB is down around 10% while S&P 500 peer Halliburton has declined around 20%. The 29 stocks in the IBD-tracked Oil & Gas-Field Services industry group have collectively fallen more than 12% in the 2025 stock market.
SLB stock has a 21-day average true range of 2.99%. The ATR metric, available on IBD's MarketSurge charting tool, gauges the characteristic breadth of a stock's behavior. Stocks that tend to make large jumps or dives in daily stock market action, the kind that can trigger sell rules and shake investors out of a stock, have a high ATR. Stocks that tend to make more incremental moves have lower ATRs.
Investors can keep tabs on the IBD Leaderboard watchlist, the IBD 50 list of top growth stocks and IBD SwingTrader along with the IBD Sector Leaders list.
SLB stock has a 31 Composite Rating out of a best-possible 99. The S&P 500 stock also has a 13 Relative Strength Rating and an 81 EPS Rating.
Please follow Kit Norton on X @KitNorton for more coverage.
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