SLB’s second quarter results were met with a significant positive market reaction, as the company’s performance exceeded Wall Street’s expectations despite a year-on-year revenue decline. Management credited broad-based international growth and a rebound in North American operations as primary contributors to the quarter. CEO Olivier Le Peuch highlighted “higher offshore activity in Latin America, Europe, Africa, and Asia,” as well as increased demand in U.S. land for production and recovery solutions. The quarter was also marked by continued operational challenges in the Middle East due to ongoing conflict, limiting activity in key countries such as Iraq, though gradual improvements were noted.
Is now the time to buy SLB? Find out in our full research report (it’s free for active Edge members).
SLB (SLB) Q2 CY2026 Highlights:
- Revenue: $8.97 billion vs analyst estimates of $8.68 billion (4.5% year-on-year decline, 3.4% beat)
- Adjusted EPS: $0.55 vs analyst estimates of $0.52 (6.3% beat)
- Operating Margin: 13.3%, down from 14.3% in the same quarter last year
- Market Capitalization: $72.59 billion
While we enjoy listening to the management’s commentary, our favorite part of earnings calls is the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From SLB’s Q2 Earnings Call
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Scott Gruber (Citigroup) asked about the magnitude and timeline of Middle East activity recovery and the durability of the exploration cycle. CEO Olivier Le Peuch detailed a gradual recovery, driven by well intervention and production solutions, while explaining that the exploration cycle is underpinned by energy security and long-term reserve needs.
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James West (Melius Research) pressed for specifics on Middle East urgency and the initial work mix. Le Peuch confirmed a mix of well interventions, ChampionX-enabled production recovery, and accelerating digital deployments as key early activities, with recovery varying by country depending on security and logistics.
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John Anderson (Barclays) questioned the expected pace of offshore growth in 2027, especially for OneSubsea and well construction. Le Peuch outlined favorable market fundamentals, noting a pipeline of final investment decisions and significant activity in deepwater regions, but highlighted that actual growth depends on successful mobilization and project timing.
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Neil Mehta (Goldman Sachs) inquired about Data Center Solutions’ product scope and economics. Le Peuch described modular, off-site manufacturing for data center infrastructure, while CFO Stephane Biguet noted the business is capital-light with strong free cash flow despite lower margins than the company average.
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Keith MacKey (RBC) asked about SLB’s pipeline and revenue potential in Venezuela. Le Peuch explained the company’s preparations for scaling operations, securing contracts for 2027, and the historical context of past $1 billion plus annual revenues in the region.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will focus on (1) the pace of Middle East activity recovery and the impact of geopolitical developments, (2) the ability of Data Center Solutions to achieve projected backlog conversions and enter new hyperscaler partnerships, and (3) progress in deepwater project awards and execution, particularly in Africa and Latin America. Continued Digital and AI adoption will also be closely watched as a driver of profitability.
SLB currently trades at $48.91, up from $47.22 just before the earnings. In the wake of this quarter, is it a buy or sell? Find out in our full research report (it’s free).
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