Actionable news
0
All posts from Actionable news
Actionable news in RDS.B: ROYAL DUTCH SHELL PLC ADS CLASS B,

Shell Disappoints Analysts With Abysmal Earnings Report

Royal Dutch Shell disappointed with its second quarter earnings, reporting numbers much lower than what analysts had expected.

Shell’s profits fell by 72 percent, dropping to $1.05 billion, down from $3.76 billion in the second quarter of 2015. The numbers are the worst quarterly earnings in 11 years. They also missed expectations by a large margin – analysts had predicted earnings of $2.16 billion.

“This is a very big surprise from Shell,” Brendan Warn, a managing director at BMO Capital Markets, told Bloomberg in an interview. “Things are not looking up in the third quarter either, with weakness in the industry’s refining environment and Shell’s oil production still under pressure.”

The second quarter also reflected the first full quarter of the BG Group takeover, which did not rescue the company from poor market conditions. BG helped increase Shell’s oil and gas production by 28 percent to 3.508 million barrels of oil equivalent per day (mboe/d), but that figure also missed market expectations – analysts’ estimates pegged output at 3.63 mboe/d. Shell’s CEO Ben van Beurden stressed that the synergies from the merger will take a few more years.

Low oil prices “continue to be a significant challenge across the business,” van Beurden said. Shell’s upstream unit had a particularly poor showing, losing $1.325 billion for the quarter. That was offset by $1.816 billion in downstream earnings, plus $868 million in profits from its integrated gas...


More