SLB, the world's largest oilfield-services company, beat Wall Street's third-quarter expectations and sent its stock up as much as 7% on Friday, as a recovering Middle East business and a fast-expanding data-center unit helped offset a choppy year for global energy markets.

The Houston-based company, long known as Schlumberger, reported adjusted earnings of $0.64 per share on revenue of $9.45 billion, both ahead of analyst consensus of roughly $0.62 per share and $9.27 billion in revenue, according to a GuruFocus report on the results. Revenue rose 5% sequentially and nearly 6% year over year. On a GAAP basis, SLB posted net income of $735 million, or $0.49 per share, after absorbing a $187 million non-cash pension settlement charge and costs tied to its ChampionX merger integration. Shares closed at $53.04, up 7.03% on the day, after opening near $49.55.

Middle East stabilizes after a rocky summer

Middle East revenue climbed 13% sequentially to about $1.9 billion, led by the UAE and Kuwait, with Saudi Arabia and Iraq also improving after activity was disrupted earlier in the year amid regional conflict and oil-price swings. CFO Stephane Biguet said the company had only partially cut resources in the region to preserve capacity for a rebound, positioning it for "strong operating leverage" if conditions keep improving, according to the company's Q3 earnings call transcript. SLB also disclosed four new integrated well-construction contracts with Saudi Aramco covering more than 450 wells over an initial three years, with mobilization beginning in the fourth quarter. Management is being cautious near-term: guidance for the fourth quarter assumes Middle East revenue holds flat at roughly $1.9 billion — about 83% of year-ago levels.

CEO OLIVIER LE PEUCH SAID THE DATA-CENTER UNIT IS ON TRACK TO EXCEED A $1 BILLION ANNUAL RUN RATE BY THE END OF 2026.

Away from oil and gas, SLB's Data Center Solutions business — which sells cooling and infrastructure technology — grew revenue 76% year over year to $230 million in the quarter, as the company leans further into AI-driven data-center demand to diversify beyond its traditional energy-services base. Le Peuch declined to give detailed 2027 financial guidance, saying specifics would come in January, but said he expects global oilfield-activity growth in the mid-single digits next year, with SLB outperforming the broader market.

SLB generated $1.5 billion in operating cash flow and $828 million in free cash flow during the quarter, spent $682 million on capital investments, and repurchased $656 million of its own stock as part of a roughly $2.4 billion buyback target for 2026. The board also approved a quarterly dividend of $0.295 per share, payable Jan. 7, 2027. Net debt stood at $9.2 billion, roughly flat with a year earlier. The company's pending acquisition of heat-exchanger maker Kelvion is not expected to close until the first half of 2027.