Schlumberger-Should Investors Steer Clear of SLB Stock Despite Strong Q4 Earnings?

Core Insights - SLB reported Q4 2024 earnings of 92 cents per share, surpassing the Zacks Consensus Estimate of 90 cents, and showing an increase from 86 cents in the same quarter last year [1][3] - The company achieved quarterly revenues of $9.28 billion, exceeding estimates of$ 9.18 billion, and up from $8.99 billion year-over-year [1][3] - Despite strong quarterly results, SLB's stock has declined by 12.3% over the past year, contrasting with an 11% increase in the industry [1][10] Financial Performance - Q4 2024 earnings per share were 92 cents, beating estimates and up from 86 cents in the previous year [3] - Quarterly revenues reached$ 9.28 billion, surpassing estimates and improving from $8.99 billion year-over-year [3] Shareholder Returns - SLB's board approved a 3.6% increase in quarterly dividends and announced a$ 2.3 billion accelerated share repurchase program [4] - The company plans to return a minimum of $4 billion to shareholders in 2025 through dividends and stock repurchases [4] Market Challenges - A decline in the international rig count indicates reduced capital expenditure by exploration and production companies, impacting SLB's demand for services [6][8] - The company anticipates a downturn in North American upstream activity due to lower capital investments and sluggish natural gas markets [8] Geopolitical Risks - SLB's revenue from Russia has decreased to 4% of its global total in 2024, down from 5% the previous year, due to geopolitical tensions and sanctions [9] - The company has implemented measures to restrict operations in Russia, which may further hinder growth prospects in that market [9] Valuation Concerns - SLB's stock is considered relatively overvalued, with a trailing 12-month EV/EBITDA ratio of 7.74, compared to the industry average of 7.28 [13] - The stock's performance and valuation suggest potential for further price decreases [13][15]