SLB earnings improved from the previous quarter as revenue rose 5% to $9.45 billion in the third quarter of 2026, supported by recovering Middle East activity and growth in North America. Announcing results on October 23, the energy technology company projected approximately $10 billion in fourth-quarter revenue and further adjusted margin expansion, although profitability remained below year-earlier levels.
Key Takeaways
- Adjusted earnings reached $0.64 per share, up from $0.55 in the second quarter but below $0.69 a year earlier.
- Reported revenue rose 6% year over year; excluding the ChampionX acquisition impact, growth was 2%.
- Fourth-quarter guidance assumes Middle East revenue stays near $1.9 billion rather than continuing its third-quarter recovery.
Table of Contents
- SLB earnings recover, but annual comparisons remain weaker
- Middle East recovery and production services support growth
- Fourth-quarter outlook assumes a pause in Middle East growth
- Cash generation supports buybacks and dividends
- Conclusion
SLB earnings recover, but annual comparisons remain weaker
SLB’s third-quarter 2026 results announcement showed adjusted EBITDA rising 9% sequentially to $2.07 billion. The adjusted EBITDA margin increased 71 basis points to 21.9%, while pretax segment operating margin expanded across all four divisions.
The sequential improvement did not restore year-earlier profitability. Adjusted EBITDA was essentially unchanged from the third quarter of 2025, and its margin was 121 basis points lower. Pretax segment operating margin reached 16.7%, compared with 18.2% a year earlier.
Reported diluted earnings were $0.49 per share, down from $0.52 in the second quarter and $0.50 a year earlier. Charges included $0.03 per share for ChampionX merger and integration costs and a $187 million non-cash pension settlement charge, equivalent to $0.12 per share.
The acquisition also affects the revenue comparison: the latest quarter included a full quarter of ChampionX activity, versus two months in the year-earlier period. Excluding that acquisition impact, global revenue increased 2% year over year rather than the reported 6%.
| Item | Details |
|---|---|
| Q3 operating cash flow | $1.51 billion |
| Q3 free cash flow | $828 million |
| Q3 capital investment | $682 million, including capital expenditure, APS projects and exploration data |
| Q3 share repurchases | $656 million |
| Quarter-end net debt | $9.2 billion, unchanged from a year earlier |
| 2026 capital investment outlook | Approximately $2.5 billion |
Middle East recovery and production services support growth
Middle East revenue increased 13% sequentially to approximately $1.9 billion despite renewed disruptions late in the quarter. North American revenue rose 7% to $2.40 billion, supported by production chemicals, artificial lift and Data Center Solutions.
Production Systems revenue increased 6% sequentially to $4 billion. Well Construction and Reservoir Performance each grew 5%, reaching approximately $2.89 billion and $1.63 billion, respectively.
Digital revenue slipped 1% to $693 million as lower exploration-data sales offset gains in applications and digital operations. Its pretax operating margin nevertheless increased to 28%. Separately, Data Center Solutions revenue grew 23% sequentially, although management said ramp-up costs meant the business was not yet lifting SLB’s overall margins.
Fourth-quarter outlook assumes a pause in Middle East growth
Management expects fourth-quarter revenue to rise 5%–7% sequentially to approximately $10 billion, with adjusted EBITDA margin expanding by another 100–150 basis points. That forecast assumes Middle East revenue remains approximately flat at $1.9 billion.
Chief Executive Officer Olivier Le Peuch said four integrated well construction contracts with Saudi Aramco cover more than 450 wells over an initial three-year term. Mobilization is planned for the fourth quarter, with full capacity expected in 2027.
Longer-term expansion plans also include the pending Kelvion acquisition, which would add thermal management technology to Data Center Solutions. The transaction remains subject to closing conditions and regulatory approvals and is expected to close in the first half of 2027.
Cash generation supports buybacks and dividends
SLB continued returning cash to shareholders while funding investment. Management targets approximately $2.4 billion in full-year share repurchases and slightly more than $4 billion in total shareholder returns for 2026.
Fourth-quarter free cash flow remains sensitive to the timing of collections in certain countries, management cautioned. The board also approved a quarterly dividend of $0.295 per share, payable on January 7, 2027, to shareholders of record on December 2, 2026.
Conclusion
The fourth-quarter outlook sets the next benchmark for SLB earnings: further sales and margin gains without assuming another increase in Middle East revenue. Management said it would provide more detail on 2027 margins in January.
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