SLB (SLB Quick QuoteSLB - Free Report) reported first-quarter 2026 earnings of 52 cents per share (excluding charges and credits), which beat the Zacks Consensus Estimate of 51 cents by 1.96%. The bottom line declined 28% from 72 cents in the year-ago quarter.

The oilfield services giant recorded total quarterly revenues of $8.72 billion, which topped the Zacks Consensus Estimate of $8.63 billion. The top line increased from the year-ago quarter’s figure of $8.49 billion.

The better-than-expected quarterly results were primarily driven by revenue increases in the Digital segment and contributions from the ChampionX acquisition. However, operational disruptions due to the Middle East conflict affected the Reservoir Performance and the Well Construction segments.

SLB Limited Price, Consensus and EPS Surprise

SLB Limited price-consensus-eps-surprise-chart | SLB Limited Quote

Q1 Segmental Performance

Revenues in the Digital unit totaled $640 million, up 9% from the year-ago quarter’s level of $587 million. Pre-tax operating income of $134 million increased from $125 million a year ago. The unit's revenues increased year over year, primarily driven by an 87% rise in Digital Operations and 2% growth in Platforms & Applications. Growth was partially offset by decreases in the Digital Exploration and Professional Services segment.

Revenues in the Reservoir Performance unit decreased 6% year over year to $1.59 billion. Pre-tax operating income totaled $257 million, which declined 9% year over year. The figure beat the Zacks Consensus Estimate of $218 million. The decline can be primarily attributed to reduced stimulation and interventional activity due to the Middle East conflict.

The Well Construction segment’s revenues fell 6% from the year-earlier quarter’s level to $2.8 billion. Pre-tax operating income declined 28% to $424 million, while the Zacks Consensus Estimate was pegged at $366 million. The segment was primarily affected by the disruptions associated with the Middle East conflict, partially mitigated by increased offshore drilling in Europe & Africa, North America and Latin America.

Revenues in the Production Systems segment amounted to $3.51 billion, up from $2.84 billion a year ago. Pre-tax operating income improved 6% year over year to $497 million but missed the Zacks Consensus Estimate of $563 million. The segment benefited from the acquired ChampionX production chemicals and artificial lift businesses.

Cash Flow & Financials

SLB reported a negative free cash flow of $23 million in the first quarter. Cash flow from operations totaled $487 million compared with $660 million in the first quarter of 2025.

As of March 31, 2026, the company had approximately $3.39 billion in cash and short-term investments. It had long-term debt of $9.67 billion at the end of the quarter.

SLB’s Outlook

SLB reiterated that its capital investment (including capex, exploration data costs and APS investments) guidance for 2026 is approximately $2.5 billion. The company intends to return more than $4 billion to shareholders in 2026.

At the beginning of the year, SLB expected global liquid supply and demand to rebalance throughout 2026 and 2027. The rebalancing process was accelerated due to the Middle East conflict. Now, the company expects post-conflict oil prices to remain above pre-conflict levels due to near-term supply disruptions, production impacts and an elevated geopolitical risk premium.

SLB expects countries to respond by diversifying supply, increasing investments in exploration and domestic resource development, and replenishing strategic reserves once the conflict subsides. Along with efforts to help customers restore Middle East production, SLB anticipates these trends will boost investment in short-cycle projects in North America and Latin America, as well as in long-cycle developments, particularly deepwater offshore. Management added that unless the conflict drags on long enough to trigger an economic slowdown, it expects a broad-based upstream recovery in 2027 and 2028.

SLB’s Zacks Rank and Key Picks

SLB currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks from the energy sector are Equinor ASA (EQNR Quick QuoteEQNR - Free Report) , Subsea7 S.A. (SUBCY Quick QuoteSUBCY - Free Report) and Galp Energia SGPS SA (GLPEY Quick QuoteGLPEY - Free Report) . While Equinor sports a Zacks Rank #1 (Strong Buy), Subsea7 and Galp Energia carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.

Equinor ASA is one of the leading integrated energy companies globally and a major supplier of natural gas in Europe. The recent conflict between the United States and Iran has resulted in a spike in gas prices and disrupted LNG supply, following damage to critical infrastructure in Qatar, tightening global LNG supply. This is expected to boost demand for Eqinor’s gas exports to Europe, positioning the company to benefit from heightened prices. The company’s expansion in the renewable energy space positions it for long-term growth as more countries transition toward cleaner energy solutions to meet their climate goals.

Subsea7 helps build underwater oil and gas fields. It is a leading player in the global offshore energy industry, providing engineering, construction and related services at offshore oil and gas fields. The long-term outlook for energy demand remains positive, and Subsea7’s focus on cost-efficient deepwater projects strengthens the position of its subsea business.

Galp Energia is a Portuguese energy company engaged in exploration and production activities. The company’s oil exploration efforts have yielded positive results, particularly with the Mopane discovery in the Orange Basin, offshore Namibia. This discovery allows Galp to diversify its global presence with the potential to become a significant oil producer in the region. It is also engaged in refining and marketing of oil products and natural gas marketing and sales.