Earnings
SLB agrees $3.4 billion Kelvion deal to expand data-centre cooling as Middle East business grows 13% on the quarter
Third-quarter revenue rose 6% to $9.45 billion, but earnings excluding charges slipped from a year earlier as margins narrowed.
HedgeWeekly News Desk ·
SLB said on Friday it has agreed to buy Kelvion, a supplier of thermal management and heat-exchange technology, for about $3.4 billion in cash plus roughly $0.7 billion of assumed debt, adding cooling equipment to its Data Center Solutions unit. The oilfield services group expects the deal to close in the first half of 2027.
Third-quarter revenue rose 6% from a year earlier and 5% from the second quarter to $9.45 billion. Earnings excluding charges and credits were $0.64 a share, up 16% on the quarter but below $0.69 a year ago. GAAP earnings were $0.49 a share after $242 million of pretax charges, the largest a $187 million pension settlement. The pretax segment operating margin was 16.7%, down 153 basis points year on year.
SLB's Middle East business grew 13% sequentially even though some countries saw renewed disruption late in the quarter, but Middle East and Asia revenue of $2.81 billion remained 6% below last year. North America revenue rose 24% to $2.40 billion, or 13% excluding ChampionX. Data Center Solutions revenue increased 76% from a year earlier to $230 million. The company generated $828 million of free cash flow and repurchased 12.9 million shares for $656 million.
Why it matters: the quarter shows SLB's growth shifting away from its traditional drilling franchise. Well Construction and Reservoir Performance revenue each fell 3% year on year, while Production Systems rose 15% and data-centre sales are growing fastest, though at $230 million they are still under 3% of group revenue, which Kelvion is meant to scale up. Chief executive Olivier Le Peuch described a compelling outlook for 2027 without giving figures, and flagged a Middle East recovery as further upside, making activity in the Gulf the main variable to watch.