In more normal times,
Shell’s
second-quarter earnings might have been passable. These are not normal times.
The oil giant reported adjusted earnings of $5.07 billion in the second quarter. But when that’s compared to the record $11.5 billion profit
Shell
posted in the same period last year, at the height of the energy crisis, it represents a steep 56% drop.
It’s even 47% lower than Shell’s (ticker: SHEL) first quarter $9.6 billion profit. It signals that the era of bumper excess profits for the world’s largest oil-and-gas companies is over, and it’s back to something resembling normality.
Shell blamed lower oil and gas prices and refining margins for the profit slump, as well as lower volumes and lower liquefied natural gas trading.
With
Exxon Mobil
(XOM) and
Chevron Corporation
(CVX) both set to report earnings Friday, it’s a timely reminder to investors to perhaps lower their expectations. However, Chevron’s earnings look set to be better than expectations, after the company released an update Sunday. It still sees a 47% drop in earnings per share.
The earnings drop didn’t stop Shell announcing a $3 billion share buyback program, though, or raising it’s quarterly dividend by 15% to $0.331 per share.
A fall in profit was expected, given that prices have tumbled, but Shell’s earnings still came in below expectations. The oil major’s earnings of 75 cents per share also fell below analysts’ estimates of 85 cents, according to FactSet data.
The London-listed company’s stock fell 1.8% in early trading, and is now up just 1% since the beginning of the year. In contrast, the shares surged 43% in 2022.
Write to Callum Keown at [email protected]
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