Shell 1Q CCS Earnings Nearly Halved But Beat Consensus -- Earnings Review
April 30 2020 - 6:40AM
Dow Jones News
By Jaime Llinares Taboada
Royal Dutch Shell PLC on Thursday reported market-beating CCS
earnings for the first quarter of the year, but slashed its
dividend for the first time since World War II. Here's what you
need to know:
CCS EARNINGS: The Anglo-Dutch oil giant's adjusted earnings on a
current cost of supplies basis--a figure that is similar to the
net-profit figure U.S. oil companies use, but excludes one-off
items--fell 46% to $2.86 billion in the first quarter but remained
above the $2.25 billion consensus of 27 brokers compiled by Vara
Research.
UPSTREAM PROFIT: Shell's upstream earnings profit excluding
identified items plunged 82% to $291 million and was below the $468
million consensus.
WHAT WE WATCHED:
--IMPAIRMENTS: Shell said that it booked impairment charges of
$749 million mainly due to changes to the oil-price outlook for
2020. The group had warned in late March that it would include a
charge of between $400 million and $800 million in this regard.
--COST SAVING PROGRESS: Capital expenditure declined 11% to
$4.97 billion compared with the first quarter of 2019. Shell had
said it would reduce 2020 investments below $20 billion from the
original $25 billion plan. Including reductions to operating costs,
the company is seeking to save between $8 billion and $9 billion
this year.
--DIVIDEND: Shell cut the first quarter dividend to $0.16 a
share from last year's $0.47 to preserve its balance sheet and
"bolster" its resilience in these uncertain times. The brokers
included in Vara's consensus had not predicted the slash.
Write to Jaime Llinares Taboada at jaime.llinares@wsj.com;
@JaimeLlinaresT
(END) Dow Jones Newswires
April 30, 2020 06:25 ET (10:25 GMT)
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