Top oilfield services provider SLB (SLB.N), opens new tab joined rivals on Friday in warning of lower spending by oil producers and tariff impacts, after missing its first-quarter profit estimates due to a significant reduction in drilling activity in Mexico.
Shares of the company were largely flat after declining as much as 2% in premarket trading.
SLB’s report rounds out the first-quarter earnings from top U.S. oilfield service providers. Rivals Halliburton (HAL.N), opens new tab and Baker Hughes (BKR.O), opens new tab this week flagged concerns about weaker demand and tariff costs.
«We expect global upstream investment to decline compared to 2024, with customer spending in the Middle East and Asia being more resilient than other regions,» said Olivier Le Peuch, SLB’s chief executive officer.
Half of SLB’s operations could be exposed to tariffs, particularly on materials traded between the U.S. and China.
The company said it was optimizing supply chains and trying to pass the tariff impact to customers, adding it will continue to cut costs, and align resources with activity levels in coming quarters.
SLB was reorganizing certain functions within its business and continuing to reduce its workforce, Reuters reported in February, citing sources.
The company expects margins to grow between 50 and 100 basis points in the second quarter from the first after taking into account the current tariff framework, it said. Revenue in the second half of 2025 is expected to be flat to mid-single digits higher than the first half.
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«It was a subdued start to the year, as revenue declined 3% year-on-year,» Le Peuch added, citing a sharper-than-expected slowdown in Mexico, a slow start to the year in Saudi Arabia and offshore Africa, and steep decline in Russia.
Latin America revenue fell 10% to $1.50 billion, with total international revenue declining 5% to $6.73 billion. Revenue from Russia was impacted by sanctions, the company added.
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In contrast, North America posted an 8% year-on-year revenue increase, partly supported by strong growth in data center infrastructure, though gains were partly offset by weaker U.S. land drilling.
The company, formerly known as Schlumberger, said earnings, excluding charges and credits, were 72 cents per share for the three months ended March 31, missing analysts’ average estimate of 74 cents, according to data compiled by LSEG.
Halliburton this week warned of a second-quarter earnings hit due to tariffs and reduced North American oilfield activity. Baker Hughes projected deeper spending cuts by global producers.