Schlumberger Ltd. (NYSE:SLB)

Current Income Tax Expense

The current income tax expense demonstrates a consistent upward trend from 2020 to 2024. It increased steadily from US$436 million in 2020 to US$1,134 million in 2024, indicating a growing burden of current tax liabilities over the periods analyzed.

Deferred Income Tax Expense

The deferred income tax expense shows notable fluctuations throughout the periods. It began with a significant negative value of US$-1,248 million in 2020, sharply rising to near zero in 2021 and 2022 (US$-31 million and US$-39 million respectively). Subsequently, it switched to a positive figure of US$28 million in 2023, before returning to a negative value of US$-41 million in 2024. This volatility suggests varying timing differences and changes in deferred tax assets or liabilities over time.

Total Tax Expense (Benefit)

The overall tax expense, combining current and deferred components, shifted from a substantial benefit of US$-812 million in 2020 to consistent expenses in the following years. From 2021 onwards, tax expenses increased steadily from US$446 million in 2021 to US$1,093 million in 2024, mirroring the pattern observed in current tax expenses. The initial tax benefit in 2020 is primarily driven by the large deferred tax benefit recorded that year.

Insights

The data indicates that the large deferred tax benefit experienced in 2020 markedly influenced the total tax expense, resulting in an overall tax benefit for that year. In contrast, from 2021 onwards, the deferred tax expense stabilized near zero or modest negative values, exerting less impact on total tax expense trends. The upward trajectory of the current income tax expense suggests increasing taxable income or changes in tax rates, whereas the volatility in deferred tax expenses may be attributable to changes in timing differences, tax regulations, or accounting estimates related to deferred tax assets and liabilities.

US federal statutory tax rate

The US federal statutory tax rate remained stable over the analyzed period, consistently holding at 21% from 2020 through 2024.

Charges and credits

This item experienced fluctuation during the period. It was -14% in 2020, indicating a significant negative impact, then no recorded data in 2021, followed by a slight negative value of -1% in 2022. The values for 2023 and 2024 are missing, precluding trend analysis for these years.

Change in valuation allowance

Data for this item was not available in 2020 and 2021. In 2022, it is shown as a negative 2%, indicating a decrease in valuation allowance, and in 2024, a smaller negative value of -1% is reported. This suggests some recovery or reduced credit in valuation allowance during these years.

Other

This component showed negative percentages in available years: -2% in 2021, absent data for 2020 and 2022, then -2% again in 2023, and -1% in 2024. The negative values suggest minor reductions or charges affecting the effective tax rate from other sources.

Effective tax rate

The effective tax rate increased substantially from 7% in 2020 to 19% in 2021, maintaining a relatively stable range thereafter, with 18% in 2022 and 19% in both 2023 and 2024. This indicates a convergence toward a tax rate close to the statutory rate, despite various adjustments from charges, credits, and valuation allowance changes.

Intangible assets

The value of intangible assets remained consistently negative throughout the observed period, ranging from -881 million US dollars in 2020 to -788 million in 2024. Although there was some fluctuation, the overall negative balance showed a slight improvement from 2020 to 2024, indicating a moderate reduction in intangible asset impairment or amortization impacts.

Net operating losses

Net operating losses displayed a clear downward trend, decreasing significantly from 421 million US dollars in 2020 to 123 million in 2024. This decline suggests an improvement in operational profitability or the utilization of accumulated losses over time, reducing the net loss carryforwards available.

Fixed assets, net

Net fixed assets experienced variability, starting at 151 million US dollars in 2020, dipping to 101 million in 2022, then rising sharply to 190 million in 2023 before falling slightly to 173 million in 2024. This pattern could indicate fluctuations in capital expenditures, asset disposals, or revaluations during these years.

Research and development credits

R&D tax credits showed a consistent upward trajectory from 96 million US dollars in 2020 to a peak of 162 million in 2023, with a minor decrease to 158 million in 2024. This growth reflects increasing qualifying R&D activities or improved credit utilization, aligning with a strategic focus on innovation.

Capitalized research and development costs

Capitalized R&D costs were first recorded in 2022 at 72 million US dollars, rising substantially to 216 million by 2024. This significant increase indicates an escalating investment in internally developed intangible assets, likely reflecting an emphasis on long-term innovation projects.

Pension and other postretirement benefits

Postretirement liabilities grew more negative from -31 million in 2020 to -136 million in 2021, then gradually improved to -62 million by 2024. The initial increase suggests higher obligations or losses in pension plans, followed by a recovery or settlement reducing future benefit liabilities over time.

Other, net

The "Other, net" category decreased markedly from 225 million US dollars in 2020 to 77 million in 2023, before rebounding to 113 million in 2024. This fluctuation indicates variability in miscellaneous net assets or liabilities, possibly due to one-time adjustments or reclassifications.

Net deferred tax assets (liabilities)

The net deferred tax position showed negative values throughout the period, shifting from -19 million US dollars in 2020 to a low of -140 million in 2023, then recovering somewhat to -67 million in 2024. This volatility could signal changes in tax planning, deferred tax liabilities, or asset realizability judgments.

The financial data for noncurrent deferred tax liabilities over the five-year period from 2020 to 2024 reveals fluctuations with no consistent upward or downward trajectory.

2020 to 2021

There is a substantial increase from 19 million US dollars to 94 million US dollars, indicating a significant rise in deferred tax obligations during this period.

2021 to 2022

The liabilities decreased to 61 million US dollars, showing a reduction of approximately 35% from the previous year.

2022 to 2023

The liabilities sharply increased again to 140 million US dollars, the highest value in the observed timeframe, more than doubling the 2022 figure.

2023 to 2024

There was a notable decrease to 67 million US dollars, roughly half of the 2023 peak.

Overall, the data demonstrates volatility in the noncurrent deferred tax liabilities, with significant rises and falls rather than steady trends. Such fluctuations may reflect changes in tax regulations, timing differences in income recognition, or shifts in the company's deferred tax asset and liability management strategies over these years.

Total Liabilities

The reported total liabilities decreased significantly from US$29,945 million at the end of 2020 to US$25,146 million by the end of 2022. This downward trend slightly reversed in 2023, with liabilities increasing to US$26,598 million, before stabilizing at US$26,585 million in 2024. The adjusted total liabilities follow a very similar pattern, showing a decrease from US$29,926 million in 2020 to US$25,085 million in 2022, followed by a moderate rise to US$26,518 million by 2024. Overall, total liabilities have trended downward in the early years with modest increases in the most recent years, indicating a period of deleveraging initially, succeeded by stabilization.

Total Stockholders’ Equity

Reported equity has shown consistent growth over the analyzed period, rising from US$12,071 million in 2020 to US$21,130 million in 2024. This represents a substantial increase of approximately 75%. Adjusted stockholders’ equity mirrors the reported figures closely, increasing steadily from US$12,090 million to US$21,197 million over the same timeframe. This continued upward trajectory in equity reflects sustained value creation for shareholders and improved financial strength over the five-year period.

Net Income (Loss) Attributable to SLB

The company experienced a significant loss in 2020, with reported net income at a negative US$10,518 million. However, from 2021 onwards, the company returned to profitability, reporting positive net income figures that steadily increased each year: US$1,881 million in 2021, US$3,441 million in 2022, US$4,203 million in 2023, and US$4,461 million in 2024. Adjusted net income exhibits a similar trend but with slightly lower values, starting from a greater loss of US$11,766 million in 2020 and then improving over the subsequent years to US$4,420 million in 2024. The trend indicates a strong recovery starting in 2021, with continuous improvement in profitability, suggesting effective operational turnaround and improved earnings performance.

Overall Financial Trends

The financial data reveals a significant recovery phase beginning in 2021 following a severe downturn in 2020. The reduction in total liabilities during the initial years, coupled with a substantial increase in stockholders’ equity, signifies strengthening of the financial position. The improvement in net income from a large loss to consistent positive earnings supports the narrative of operational recovery and enhanced profitability. Adjusted values consistently align with reported figures, providing confirmation of the observed trends and the reliability of the financial performance improvements over the period.

Net Profit Margin

Both reported and adjusted net profit margins exhibit a significant turnaround from negative values in 2020 to positive and steadily increasing margins through 2024. The reported net profit margin improved from -44.57% in 2020 to approximately 12.3% by 2024, while the adjusted margin followed a similar trajectory, improving from -49.85% to about 12.2% over the same period. This indicates a recovery and stabilization in profitability after a substantial loss in 2020, with the adjusted figures consistently slightly below the reported ones.

Financial Leverage

Reported and adjusted financial leverage ratios show a consistent downward trend from above 3.5 in 2020 to around 2.3 by 2024. This decline suggests a gradual reduction in the reliance on debt financing relative to equity, potentially indicating an improvement in capital structure and lower financial risk over the five-year span.

Return on Equity (ROE)

The ROE, both reported and adjusted, demonstrates a marked recovery from deeply negative values in 2020 to strongly positive figures by 2024. Reported ROE increased from -87.13% in 2020 to approximately 21.1% in 2024, with adjusted ROE showing a parallel increase from -97.32% to roughly 20.85%. This progression reflects a substantial improvement in the company’s ability to generate earnings from shareholders’ equity, aligning closely with the improved profit margins.

Return on Assets (ROA)

Reported and adjusted ROA also show a positive trend, moving from negative returns in 2020 (around -25% reported and -28% adjusted) to modest positive figures close to 9% by 2024. This trend indicates enhanced efficiency in asset utilization to generate profits, supporting the overall positive performance trends observed in profitability and returns.

General Observations

The data reflects a company recovering from a significant loss period in 2020 to achieving stable and improving profitability and return metrics over the succeeding years. The consistency between reported and adjusted figures suggests that deferred income tax adjustments have a minimal impact on the overall trends observed. The steady reduction in financial leverage further complements the improving profitability ratios, indicating a strengthening financial position and potentially lower risk profile.

Net Income Trends

The reported net income attributable to the company shows a significant recovery from a substantial loss of $10,518 million in 2020 to positive values in subsequent years. The net income increased steadily over the period, reaching $4,461 million in 2024. This upward trend is mirrored by the adjusted net income, which similarly recovered from a loss of $11,766 million in 2020 to $4,420 million in 2024, indicating consistent improvement in the company’s profitability after adjustments.

Net Profit Margin Patterns

Reported net profit margin follows a comparable pattern, evolving from a negative margin of -44.57% in 2020 to positive margins above 8% from 2021 onward, peaking at 12.68% in 2023 before a slight reduction to 12.29% in 2024. The adjusted net profit margin shows a similar trajectory, moving from -49.85% in 2020 to a stabilized range around 12%, with a peak of 12.77% in 2023 and a slight decrease to 12.18% in 2024.

Comparative Observations

The close alignment between reported and adjusted figures suggests that adjustments to the income and margins do not significantly alter the overall profitability trends. Both sets of data demonstrate a recovery from heavy losses in 2020, stabilized profitability beginning in 2021, and consistent performance through 2024. The minor deviations between reported and adjusted margins indicate limited impact from deferred income tax or other adjustments on the company’s net profit margin.

Overall Insight

The financial data reflect a strong recovery and stabilization process over the five-year period analyzed. The company moved from a period of deep losses to achieving sustained profitability with margins consistently above 8% since 2021. This suggests improved operational efficiency, market conditions, or strategic initiatives that have positively influenced earnings capacity and margin stability over time.

Stockholders’ Equity

The reported total stockholders’ equity shows a consistent upward trend from 12,071 million US dollars in 2020 to 21,130 million US dollars in 2024, indicating a steady increase in the company’s equity base over the five-year period. Similarly, the adjusted total stockholders’ equity follows this pattern, rising from 12,090 million US dollars in 2020 to 21,197 million US dollars in 2024. The adjustments made result in slightly higher equity figures each year, but the growth trajectory remains parallel to the reported values.

Financial Leverage

The reported financial leverage exhibits a continuous decline from a ratio of 3.52 in 2020 to 2.32 in 2024, reflecting a progressive reduction in leverage and potentially improved solvency or capital structure management. The adjusted financial leverage mirrors this downward trend, decreasing from 3.51 in 2020 to 2.31 in 2024, with marginal differences compared to reported figures. This decline suggests a consistent effort to lower debt relative to equity or overall financial obligations over the analyzed timeframe.

Overall Observations

The analysis indicates that the company has been strengthening its equity position steadily while reducing financial leverage throughout the period. Both reported and adjusted figures for stockholders’ equity and financial leverage show close alignment, suggesting limited impact from income tax adjustments on these key financial metrics. The trends collectively point to a progressively more robust financial structure and potentially lower financial risk as the leverage diminishes year over year.

Net Income Trends

The reported net income attributable to the company experienced a significant turnaround from a loss of approximately $10.5 billion in 2020 to consistent profitability in subsequent years, reaching $4.5 billion by 2024. Adjusted net income followed a similar trajectory, starting slightly lower than reported figures in 2020 but closely aligning with reported figures in later years, also increasing steadily through 2024.

Stockholders’ Equity Development

Both reported and adjusted stockholders’ equity showed a steady increase over the period, rising from about $12.1 billion in 2020 to over $21 billion by 2024. The adjusted figures were marginally higher than reported figures each year, indicating some adjustments that positively affected equity valuation.

Return on Equity (ROE) Patterns

ROE metrics displayed a dramatic recovery from deeply negative values in 2020 (-87.13% reported, -97.32% adjusted) to positive and improving returns in the following years. By 2024, reported ROE reached 21.11%, while adjusted ROE was slightly lower at 20.85%, indicating strong profitability relative to equity. The adjusted ROE consistently tracked closely with reported metrics but remained marginally lower.

Overall Financial Insights

The company demonstrated strong financial recovery and growth after 2020, with marked improvement in profitability and shareholder equity base. Adjusted financial measures closely mirrored reported data, which suggests that adjustments made for deferred income taxes and other items did not fundamentally alter the financial performance trends. The consistent upward trend in equity and ROE highlights enhanced efficiency in generating returns for shareholders over the period reviewed.

Net Income Trends

The reported net income attributable to the company showed a significant turnaround over the period. In 2020, there was a substantial loss of $10,518 million, which shifted to positive territory with a net income of $1,881 million in 2021. The upward trend continued steadily through 2022, 2023, and 2024, reaching $3,441 million, $4,203 million, and $4,461 million respectively. The adjusted net income followed a similar pattern, starting with a larger loss of $11,766 million in 2020 and then recovering to positive figures from 2021 onward, with values slightly lower than the reported net income but maintaining a consistent increase yearly.

Return on Assets (ROA) Patterns

The reported ROA exhibited a dramatic improvement, moving from a negative return of -24.79% in 2020 to positive figures in subsequent years: 4.53% in 2021, rising steadily to 7.98% in 2022, 8.76% in 2023, and 9.12% in 2024. The adjusted ROA showed a parallel but slightly lower trajectory, from a negative -27.73% in 2020 to positive returns starting at 4.46% in 2021, and gradually increasing through the years to 7.89%, 8.82%, and 9.03% in 2022, 2023, and 2024 respectively.

Overall Insights

Both reported and adjusted financial metrics demonstrate a significant recovery and consistent growth after 2020, with the company moving from heavy losses and negative returns to sustained profitability and improving asset efficiency. The closeness of reported and adjusted figures indicates relative stability in the adjustments made for deferred income tax impacts, reflecting a reliable trend in underlying financial performance.