Schlumberger Ltd. (NYSE:SLB)

The analysis of the quarterly financial ratios indicates a notable recovery and stabilization trend over the observed periods. Initially, the Return on Assets (ROA) and Return on Equity (ROE) exhibit substantial negative values, with ROA reaching as low as -24.79% and ROE declining to -87.13%, suggesting significant operational and financial challenges during those early quarters. However, from subsequent quarters onwards, there is a marked improvement in profitability measures, with ROA progressively rising into positive territory, achieving levels between approximately 8% and 9% in the most recent periods. Similarly, ROE follows a strong upward trajectory, climbing to around 20% to 21% consistently from late 2021 through the latest available data.

Concurrently, Financial Leverage shows a gradual decreasing trend from the highest ratio of 3.71 down to values generally in the range of 2.3 to 2.5 in the recent quarters. This decline in leverage implies a reduction in reliance on debt financing, signaling a strengthening balance sheet and possibly more cautious financial management. The reduction in leverage likely contributes to the improved returns on equity, as lower debt levels reduce financial risk and associated costs.

Collectively, the data illustrate a significant recovery phase followed by a period of relative stability. Profitability ratios recovering from negative to strong positive values along with a steady decline in financial leverage reflect enhanced operational efficiency and improved capital structure. These trends suggest an overall strengthening of financial health and a more effective deployment of assets and equity capital over time.

Return on Assets (ROA)

Initially negative, ROA improved steadily to reach positive values near 8-9%, indicating better asset utilization and operational performance.

Financial Leverage

Decreased from above 3.7 to a stable range of approximately 2.3-2.5, suggesting reduced debt dependency and improved financial stability.

Return on Equity (ROE)

Recovered dramatically from very negative values to around 20-21%, reflecting enhanced profitability for shareholders driven by operational improvements and lower leverage.

The financial data indicates multiple trends across key performance metrics over several quarters, highlighting the company's evolving profitability, efficiency, and leverage profile.

Net Profit Margin

The net profit margin was significantly negative at -44.57% in December 2020, indicating substantial losses during that period. Subsequently, the company demonstrated a strong recovery trend, achieving positive margins starting from March 2021, with gradual improvements through 2022 and 2023. The margin stabilizes in the 12% to 13% range from 2022 onward, before showing a slight declining tendency towards the end of the observed period, settling at approximately 11.5% by mid-2025.

Asset Turnover

Asset turnover ratios begin at 0.56 in March 2021 and exhibit a generally increasing trajectory over the years. The ratio rises steadily, reaching around 0.73 to 0.74 by the end of 2024 and into mid-2025. This suggests enhanced operational efficiency and better utilization of assets to generate revenue over time.

Financial Leverage

Financial leverage data over the examined quarters shows a declining trend from a higher leverage of around 3.12 to 3.71 in early 2020 to a lower leverage close to 2.36 to 2.4 in the later periods of 2024 and 2025. This reduction indicates a strategy towards deleveraging, potentially lowering financial risk by reducing reliance on debt financing.

Return on Equity (ROE)

There is a pronounced negative ROE in December 2020 at -87.13%, reflecting the heavy losses reported in that period. From early 2021 onward, ROE improves markedly, climbing into positive territory and showing consistent growth. By 2022 and continuing through 2023, ROE stabilizes in the 19% to 21.5% range, maintaining this level with minor fluctuations into mid-2025. This steady return indicates a strengthening ability to generate profits for shareholders.

Overall, the data depicts a recovery phase following significant losses at the end of 2020, with gradually improving profitability and operational efficiency. The decreasing financial leverage alongside stable and improving return on equity suggests a more conservative and balanced capital structure that supports sustained shareholder value creation.

The financial data reveals several notable trends and shifts across the examined periods.

Tax Burden

The tax burden ratio exhibits a stable pattern, maintaining a range close to 0.8 from the third quarter of 2020 onward. This consistency suggests effective tax management and steady taxation conditions over the intervals observed.

Interest Burden

The interest burden ratio shows a clear upward trend starting near 0.7 in late 2020 and gradually rising to about 0.9 by the end of 2024. This increase indicates a decreasing proportion of income lost to interest expenses, which positively impacts profitability from an operational earnings perspective.

EBIT Margin

There is a significant improvement in the EBIT margin, moving from a severe negative margin in early 2020 (around -45.62%) to positive and steadily increasing margins exceeding 17% throughout 2023 and stabilizing just above 16% towards early 2025. This turnaround demonstrates a substantial recovery and improvement in operating efficiency and profitability following earlier difficulties.

Asset Turnover

The asset turnover ratio shows a gradual and consistent increase from about 0.5 in 2020 to around 0.74 by the latter part of 2024. This suggests enhanced efficiency in generating revenue from assets, indicating improved asset utilization over the periods analyzed.

Financial Leverage

The financial leverage ratio shows a declining trend from over 3.1 at the start of the data series to approximately 2.3 by late 2024, with a slight increase noted again near the middle of 2025. The decrease reflects a reduction in reliance on debt financing relative to equity, potentially lowering financial risk.

Return on Equity (ROE)

The ROE follows a trajectory similar to the EBIT margin, with a marked recovery from deeply negative returns (around -87.13%) in early 2020 to positive returns exceeding 20% from 2022 onward. This sustained improvement highlights increasing profitability and value generation for shareholders, supported by enhanced operational results and controls on financial leverage.

Overall, the data indicates a period of financial recovery and strengthening operational performance. Key profitability metrics such as EBIT margin and ROE have rebounded markedly from negative territory to solid positive levels, while balance sheet and efficiency indicators show improvements in asset utilization and reduced financial leverage, supporting a robust financial position approaching 2025.

Net Profit Margin

The net profit margin experienced a significant decline in the early period, reaching a low of -44.57% as of December 31, 2020. Subsequently, there was a marked recovery beginning in March 31, 2021, with the margin gradually increasing into positive territory and showing consistent improvement thereafter. From June 30, 2021, to June 30, 2025, the margin stabilized between around 8% and 13%, peaking at 12.97% on December 31, 2023, before slightly moderating but remaining above 11% through mid-2025. This suggests an overall strengthening profitability trend after a period of substantial contraction.

Asset Turnover

Asset turnover data begins from March 31, 2021, showing an initial ratio of 0.56, which slightly fluctuated in the mid-0.5 range. From September 30, 2021, forward, there is a gradual and steady improvement observed, peaking at 0.74 on June 30, 2025. This upward trend indicates enhanced efficiency in using assets to generate revenue over the observed periods.

Return on Assets (ROA)

Return on assets mirrors the net profit margin trend with a low point at -24.79% in December 31, 2020, indicating poor asset profitability during that period. After this trough, ROA improved steadily and consistently, reaching a high of 9.12% on March 31, 2025. The values generally fluctuated between 4% and 9%, evidencing improving asset utilization and profitability over time.

Tax Burden

The tax burden ratio demonstrates consistency from June 2021 onward, maintaining a stable level around 0.80 to 0.82. This suggests a steady proportion of pre-tax income retained after taxes without significant fluctuations during the observed periods.

Interest Burden

This ratio exhibits a gradual improvement over time. Starting near 0.70 in June 2021, it increases steadily, peaking at approximately 0.92 during late 2023 and remaining at similar levels through mid-2025. This indicates a decreasing interest expense relative to earnings before interest and taxes, reflecting potentially improved debt management or lower borrowing costs.

EBIT Margin

The EBIT margin reveals a marked recovery trend. Initial values in early 2020 show significant negative margins, with a low of -45.62% in September 2020. However, from late 2020 forward, a clear upward trajectory is observed, reaching over 17% through much of 2023 before a slight decline to around 16% in the latest quarters. This trend suggests enhanced operational efficiency or improved revenue generation relative to operating costs.

Asset Turnover

The asset turnover ratio shows a consistent incremental increase throughout the periods analyzed, beginning at approximately 0.56 in late 2020 and rising steadily to about 0.73 by mid-2025. The improving asset utilization indicates that the company is generating more sales per unit of assets, implying enhanced operational productivity.

Return on Assets (ROA)

The ROA follows a similar recovery pattern as the EBIT margin, with extremely negative values in early 2020 (-24.79%) improving to positive territory by mid-2021. Subsequently, ROA continues to rise gradually, reaching a range between 8.5% and 9.1% in the period from 2023 to mid-2025. This steady improvement reflects enhanced profitability and efficient asset use over time.

Tax Burden

The tax burden ratio displays a generally stable trend from the available data starting in the third quarter of 2020 through the second quarter of 2025. The ratio remains within a narrow range slightly above 0.80, indicating a consistent tax impact on earnings over this period.

Interest Burden

The interest burden ratio shows a clear upward trend starting at 0.70 in the third quarter of 2020 and rising steadily to peak around 0.92 from the third quarter of 2022 through early 2025. This increase suggests a decreasing interest expense relative to earnings, improving financial leverage or lower borrowing costs over time.

EBIT Margin

The EBIT margin experienced significant volatility in the earliest periods, starting from deep negative values (-45.62% in third quarter 2020 and -10.75% in fourth quarter 2020). From the first quarter of 2021 onward, a marked recovery is observed with EBIT margin turning positive and progressively increasing to a relatively stable range near 16% to 17.5% by 2023 to 2025. This pattern indicates a substantial operational turnaround and improved profitability at the operating level.

Net Profit Margin

The net profit margin mirrors the pattern of the EBIT margin, reflecting a recovery from heavy losses (-44.57% in third quarter 2020 and -13.3% in fourth quarter 2020) to sustained positive profitability from early 2021 onward. The margins increase steadily, reaching around 12% to 13% by 2022 and maintaining this level with minor fluctuations through 2025. This trend signifies enhanced overall profitability post costs, taxes, and interest.