Shell Beats Market Views as Profit Tumbles on Lower Gas Trading, Refining Margins — Update

By Christian Moess Laursen

Shell's second-quarter profit roughly halved on quarter, driven by lower refining margins and a slump in integrated gas trading, although its adjusted earnings beat market views.

The British energy major on Thursday booked adjusted earnings of $6.29 billion for the period, down from $7.73 billion in the first quarter, while market watchers had expected $6.01 billion, according to a Vara Research survey.

However, its profit measured on a current cost of supplies basis--a figure similar to the net income that U.S. oil companies report--nearly halved on quarter to $3.75 billion, weighed by lower liquefied natural-gas trading and refining margins.

Shell's integrated gas business delivered a 27% fall in adjusted earnings to $2.675 billion, although this still beat a consensus of $2.612 billion, according to Vara Research.

The decline reflects a lower contribution from trading due to weaker realized prices and volumes, Shell said.

Meanwhile, cash flow from operations--another closely watched metric as it supports Shell's buyback pledge--rose slightly to $13.51 billion for the quarter, while analysts had expected $12.60 billion.

Shell's less-than-expected earnings fall makes it the latest European oil-and-gas major to perform better than analysts had expected, following its London rival BP, Italy's Eni and Portugal's Eni posting similar feats these past weeks.

Shell, Europe's biggest oil-and-gas company, declared a quarterly dividend of 34.40 cents and said it would buy back $3.5 billion of shares during the third quarter.

Write to Christian Moess Laursen at christian.moess@wsj.com

(END) Dow Jones Newswires

August 01, 2024 03:06 ET (07:06 GMT)

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