Royal Dutch Shell Earnings Missed the Mark. The Stock Is Falling.
A Shell logo is pictured outside a Royal Dutch Shell petrol station
Photograph by Adrian Dennis/AFP/Getty Images
U.S.-listed shares of
Royal Dutch Shell
were falling more than 4% in premarket trading Thursday after the oil major missed third-quarter profit forecasts, citing damage caused by Hurricane Ida in the U.S.
The U.K.-listed company, which is under pressure from activist investor Daniel Loeb’s Third Point to break itself up, had flagged earlier this month it would take a $400 million hit to earnings because of the prolonged outage.
Shell (ticker: RDS.A) posted third-quarter adjusted earnings of $4.1 billion which were short of the $5.31 billion analysts were expecting and down from $5.5 in the second quarter.
Shell also set itself tougher emissions targets.
CEO Ben van Beurden said in a statement: “This quarter we’ve generated record cash flow, maintained capital discipline and announced our intention to distribute $7 billion to our shareholders from the sale of our Permian assets.
“Today, we also set a new 2030 target to halve the absolute emissions from our operations, compared to 2016 levels on a net basis. Altogether, this is clear evidence of how we are accelerating our Powering Progress strategy, purposefully and profitably.”
Peter McNally, an analyst at research firm Third Bridge said: “The financial profile at Shell has changed dramatically over the past year. The company is on firmer financial footing and the questions is in which areas will Shell choose to make its future investments—meeting the near term needs of energy supplies in oil & gas or the longer-term climate initiatives it has planned.”
Write to Rupert Steiner at firstname.lastname@example.org