North American demand warms up + acquisition dividends SLB (SLB. US) Q3 profit exceeds expectations

Due to the stable performance of the North American market demand and the business contribution brought by the recent acquisition of ChampionX, which effectively offset the weak trend in oilfield activities in other regions, the world's largest oilfield services company SLB (SLB.US) announced third-quarter profits on Friday that exceeded expectations. Currently, the US oilfield market is gradually stabilizing after months of spending cuts, but demand in the international market, which has always been a traditional major source of profit for SLB, remains weak. According to forecast data from the U.S. Energy Information Administration (EIA), due to production efficiency improvements, US crude oil daily production is expected to reach a historic high of 13.41 million barrels by 2025, which continues to drive demand growth for drilling equipment and related services. The latest data from Baker Hughes confirms the rebound in oilfield activity in North America. The number of active drilling rigs, which serves as a leading indicator of future production, increased by 3% to 718 rigs in the third quarter, while the international rig count remained at 1,080 rigs. In the third quarter, international revenue, which accounts for about 80% of SLB's total revenue, fell by 7% to $6.92 billion, while North American revenue increased by 14% to $1.93 billion. In the quarter ending on September 30, the company's adjusted EPS reached $0.69, exceeding analysts' consensus estimate of $0.66. Considering the current oversupply in the oil market and the political uncertainty of GEO Group Inc., SLB CEO Olivier Le Peuch described this quarter's performance as "resilient." He added that with the rebalancing of the oil and gas market supply and demand, the ongoing investment in crude oil production capacity, the progress of natural gas expansion projects, and the constructive outlook for deepwater operations, international business is expected to rebound. Furthermore, the completion of the $7.75 billion acquisition of peer company ChampionX also injected new momentum into this quarter's profit performance. The company's total revenue decreased by 2.5% from $9.159 billion in the same period last year to $8.928 billion, but increased by 4% quarter-on-quarter. Excluding the impact of this acquisition, SLB's global revenue in the third quarter actually decreased by 9% year-on-year.