SLB profit holds up as Middle East business recovers and data-center unit surges

SLB, the Houston-based oilfield-services company formerly known as Schlumberger, reported third-quarter revenue of $9.45 billion on Friday, up 6 percent from a year earlier, as a recovery in Middle East drilling activity and rapid growth in equipment for artificial-intelligence data centers offset a continued slowdown in some international markets. The results were disclosed in a filing with the Securities and Exchange Commission.

Net income attributable to SLB was $735 million, or 49 cents a diluted share on a GAAP basis, down slightly from $739 million a year earlier. Excluding charges and credits, adjusted earnings were 64 cents a share, ahead of the roughly 62-cent consensus analysts had been expecting and up 16 percent from the prior quarter, though down 7 percent from a year ago. Adjusted earnings before interest, taxes, depreciation and amortization were $2.07 billion, essentially flat year over year. The company generated $1.51 billion in operating cash flow and $828 million in free cash flow during the quarter, and its board approved a quarterly dividend of 29.5 cents a share, unchanged from the prior payout, along with $656 million of share buybacks in the quarter.

A Middle East rebound, unevenly

International revenue, which still accounts for roughly three-quarters of SLB's business, grew 5 percent from the prior quarter but was up just 1 percent from a year ago, reflecting lingering effects of the regional conflict that disrupted Gulf operations earlier in 2026. The International Energy Agency had at one point described the fallout from that conflict, which included a blockade of the Strait of Hormuz, as among the largest oil-supply disruptions on record.

SLB said Middle East revenue grew 13 percent from the second quarter as operations in Iraq, Kuwait, Oman, Saudi Arabia, Qatar and the United Arab Emirates improved, though "certain countries experienced renewed disruptions during the final weeks of the quarter." Measured against a year ago, Middle East revenue was still down 12 percent. North America, by contrast, climbed 24 percent year over year to $2.4 billion, helped by stronger U.S. land activity and the data-center business.

"SLB delivered solid third-quarter results with all regions growing sequentially — led by a gradual recovery in the Middle East, growth in North America land and broadening international activity in deepwater offshore basins," said Olivier Le Peuch, SLB's chief executive.

Data centers become a distinct growth line

The quarter's more unusual story was the continued expansion of SLB's Data Center Solutions unit, which designs modular enclosures, cooling systems and other hardware for the computing infrastructure that underpins artificial-intelligence workloads. Revenue in that business reached $230 million in the quarter, up 23 percent from the second quarter and 76 percent from a year earlier, when it generated $131 million. Over the first nine months of 2026, the unit's revenue rose 68 percent to $557 million.

SLB said it is building a facility in Canada to assemble and test data-center infrastructure, following what the company described as a contract award from Meta Platforms; the facility is expected to open in the first half of 2027 and will serve as a delivery partner for modular offsite assembly and installation. "AI is driving unprecedented investment in data center infrastructure, and customers are looking for partners who can deploy quickly, reliably and at scale," Le Peuch said in the release.

To build out that capability further, SLB disclosed on Aug. 31 that it had signed an agreement to acquire Kelvion, a German maker of thermal-management and heat-exchange equipment, from funds managed by Apollo and Triton for about $3.4 billion in cash plus roughly $700 million of assumed debt, a deal valued at more than $4 billion in total. SLB has said the transaction, expected to close in the first half of 2027, will add cooling technology that complements its existing data-center hardware and is expected to be accretive to earnings and free cash flow within a year of closing.

ChampionX integration and who is affected

Much of SLB's reported growth also reflects its 2025 acquisition of oilfield-chemicals and artificial-lift maker ChampionX. Those businesses contributed $956 million of revenue in the quarter, split between $662 million in North America and $263 million internationally; a year earlier, ChampionX had contributed only two months of results. Stripping out the acquisition's effect, SLB's global revenue rose a more modest 2 percent year over year, with international revenue essentially flat and North America revenue up 13 percent — a reminder that underlying demand outside the data-center business remains soft in parts of the world.

The results matter beyond SLB's own shareholders and roughly tens of thousands of employees across more than 100 countries. National oil companies across the Gulf, Latin America and Africa depend on SLB's drilling, evaluation and completion services to bring output online, and the company's commentary on the Middle East offers one of the more detailed private-sector readings of how quickly the region's oil infrastructure is recovering from conflict-related disruption. At the same time, hyperscale cloud and AI companies — Meta among them, per SLB's own disclosure — are emerging as a new category of customer for an industry historically tied to oil and gas prices.

What's next

SLB gave no formal revenue or profit guidance for the fourth quarter, saying instead that it still expects about $2.5 billion of capital investment for the full year 2026. Le Peuch said the company sees "a very compelling outlook for 2027," citing deepwater growth across Latin America, Europe, Sub-Saharan Africa and Asia, expanding international diversification by U.S. shale operators, and "significant activity increases in Venezuela," along with further upside "as Middle East activity recovers." The company's investor-relations team had scheduled the results and a conference call for Oct. 23 several weeks in advance. Investors will next watch whether the Kelvion deal clears regulatory approval on schedule, and whether Middle East activity — and the data-center build-out — continue at their current pace into next year.