Shell’s earnings almost double but shares slide
SHELL’S shares closed down 4.34 per cent yesterday, despite the oil giant announcing fourth-quarter earnings that soared to $4.2bn (£2.8bn), 93 per cent up from $2.2bn for the same quarter a year ago.
Full-year earnings also recorded a healthy 14 per cent jump to $19.04bn, up from $16bn a year earlier.
The energy giant has turned around its fortunes after issuing a profit warning last month, but hasn’t been totally able to shrug off the impact of crashing oil prices. Naturally, revenues from oil sales are sliding, falling 21 per cent.
As a result, the company plans to curtail capital spending by more than $15bn over the next three years.
Shell said its earnings rise was triggered primarily by the company’s downstream sectors, but was offset by low oil prices.
Its dividend was kept stable at $0.47 per share, and will remain at that level in the first quarter of 2015.
Most oil producers have not fared well as oil prices have plummeted, but Shell’s plan to deal with falling prices has been clear: keep selling.
It has held back hold back from some big investments. Shell scrapped plans to build a proposed petrochemicals plant in Qatar earlier this year. However it also is developing a $11bn project in Iraq, due at the end of the decade. Chief executive Ben van Beurden said: “Our strategy is delivering with good performance on our three themes of financial performance, capital efficiency and project delivery. These will remain priorities…Shell has options to further reduce spending, but we are not over-reacting to current low oil prices and keeping our best opportunities on the table.”