SLB’s Broader Growth Mix Gives It an Edge Over Halliburton

SLB appears to have the stronger investment case than Halliburton as oilfield activity improves. SLB reported $8.97 billion in second-quarter revenue, compared with Halliburton’s $5.7 billion.

Both companies grew revenue from the first quarter. SLB’s sales rose 3% sequentially and 5% year over year, while Halliburton’s rose 6% sequentially. Halliburton also generated $668 million in free cash flow, close to SLB’s $716 million.

The difference is in the range of SLB’s growth drivers. Its international revenue increased 3% from the prior quarter, with offshore activity in Latin America, Europe and Africa, and Asia helping offset a 13% decline in the Middle East.

Halliburton also reported stronger activity, including increased stimulation work in the Western Hemisphere and improved well-intervention services in Asia. But the company said Middle East conflict reduced activity in Kuwait, Iraq and Qatar, while it expects only incremental improvement in North America.

SLB is expanding beyond traditional oilfield services. Its Data Center Solutions business brought in $186 million in the second quarter, up 80% from a year earlier. Management expects the unit to reach an annualized revenue run rate above $2 billion by the end of 2027.

Longer-term offshore projects offer another potential tailwind. SLB has set an ambition for subsea bookings to reach $9 billion over two years, though project timing and customer investment decisions remain important.

Both companies returned cash to shareholders in the quarter: Halliburton repurchased about $200 million of stock, while SLB bought back $648 million. Halliburton offers a direct recovery play, but SLB’s international reach, offshore pipeline and data-center business give it more ways to grow if drilling demand stalls.