SLB: higher revenue accompanies a narrower earnings ratio

In brief

• SLB’s revenue increased while net income attributable to its shareholders fell slightly.
• Our calculation shows the ratio of earnings to revenue alongside growth.
• A Hungarian saver’s forint result requires separate currency accounting and cost calculations.

SLB’s results published on 23 October show revenue and net income moving in different directions. This matters for Hungarian retail investors because expanding business revenue alone establishes neither improving profitability nor an attractive share valuation. The comparison below starts with company figures and illustrates forint exposure through a separate hypothetical example.

In the third quarter ended 30 September, revenue was USD 9449 million and net income attributable to SLB shareholders was USD 735 million. The corresponding figures for the 2025 comparison period were USD 8928 million and USD 739 million. In the release, chief executive Olivier Le Peuch described performance as “all regions growing sequentially”. This is management’s assessment and refers to a quarterly comparison; our charts instead compare the same quarter across years.

More revenue, a smaller earnings ratio

The first chart shows revenue for the two third quarters in billion USD, with an axis starting at zero. We also checked the previous year’s figures in the earlier results release. Growth of 5.84 percent is our calculation: divide 9449 by 8928, subtract one and multiply by a hundred. We retained the full input precision during calculation and rounded only the final result to two decimal places.

Using the same method, net income changed by minus 0.54 percent. The difference between the two rates means that higher revenue accompanied slightly lower accounting earnings attributable to shareholders. It does not establish that a particular expense caused the difference. Demonstrating causes would require breaking down the detailed income-statement items and the comparability of the periods.

The second chart presents our own ratio: net income attributable to shareholders divided by consolidated revenue. It fell from 8.28 percent to 7.78 percent, approximately 0.50 percentage points. This is neither an operating margin, adjusted EBITDA nor a share return. We specify the definition so that readers compare it with another company’s indicator only when the underlying content matches.

The cautious conclusion from these columns is a narrowing earnings ratio. A single comparison cannot settle the company’s longer-term profitability. It nevertheless provides a useful checkpoint: in the next report, examine whether revenue and net-income growth converge. A new data series could establish a turn; optimistic management language alone cannot.

Acquisition effects also matter when interpreting the baseline. According to SLB, annual revenue growth excluding the impact of ChampionX was 2 percent. This differs from the rate calculated from total reported revenue. The measures answer different questions, so we do not describe total growth as organic growth. Changes in the company perimeter through acquisitions and the performance of the existing business require separate examination.

Rounding makes charts readable without increasing the precision of the underlying figures. Published amounts in millions are aggregated data. Anyone repeating the calculation in a spreadsheet should retain the input amounts and round ratios only for display. This avoids a result reconstructed from rounded percentages diverging from the original calculation and producing a misleading comparison.

What does this mean in forints?

A company’s earnings statement in USD and a Hungarian owner’s investment result in forints are separate accounts. The share price in USD, the forint price of the USD and provider fees operate through different channels. Even if the USD share price stays unchanged, the investment’s forint value can move. This follows from currency conversion without requiring an exchange-rate forecast.

Our illustrative scenario assumes an unchanged USD share price and hypothetical total costs equal to 1 percent of the ending value. With the forint price of the USD changing by minus 5 percent, zero and plus 5 percent, net forint results are respectively minus 5.95, minus 1.00 and plus 3.95 percent. The formula multiplies the initial value by the currency-change factor and 0.99, then subtracts the initial value.

These examples are neither market quotations nor forecasts carrying assigned probabilities. They exclude taxes and dividends. The cost assumption is a simplification: actual purchase, sale, currency-conversion or account-maintenance fees may be charged at different times and on different bases. Calculating an investor’s actual result requires entering each fee with the amount and date shown on their own statement.

The timing of costs can particularly alter comparisons for smaller positions when a fixed fee is involved. The same fixed sum absorbs a larger share of a smaller investment. This is mathematical proportionality, not a judgment on a particular broker’s fees. Our uniform percentage deduction is therefore easily reproducible but cannot replace checking the actual fee schedule and transaction statement.

Outlook: what evidence would change the picture?

A favourable scenario would see net income rising faster than revenue in the next comparable period, with the improved ratio accompanied by cash generation. In an adverse scenario, the earnings ratio would narrow further despite expanding sales. These are conditional frameworks for interpretation, not estimates of SLB’s future figures. Examining cash movements requires separate data.

Assessing an investment price also requires asking what earnings the market already expects. The same business performance can deliver different returns at different entry prices. Without a verified share price and a consistent earnings basis, we calculate neither a price target nor a valuation multiple. Comparing profit and revenue can provide an initial screen; it is not a full company valuation and particularly does not determine an appropriate personal position size.

Our Lam Research analysis separated business performance and currency effects using another company’s data. Our Cleveland-Cliffs analysis relates to interpreting adjusted indicators. Definitions matter more than similar names: accounting net income, operating earnings and adjusted margins are not substitutes. Always select matching periods and an appropriate denominator.

The next development to watch is SLB’s next results report, including comparable revenue, net income and cash flow. The same formulas can then be run again. Hungarian savers can separately track currency and fees in their own records. An apparent contradiction between favourable business news and an unfavourable personal return can thus be broken down into specific factors, without providing personalised buy or sell advice.