Shell 2Q Adjusted Profit Beat Expectations -- Earnings Review
30 Juli 2020 - 1:28PM
Dow Jones News
By Jaime Llinares Taboada
Royal Dutch Shell PLC reported results for the second quarter on
Thursday. Here's what you need to know:
ADJUSTED CCS EARNINGS: The British-Dutch oil giant made an
adjusted profit on a current cost of supply basis of $638 million.
This was down 82% from a year earlier, as the pandemic hit demand
and prices, but better than the consensus estimate of a $674
million adjusted loss--taken from the company's website and based
on 23 forecasts. However, analysts said the outperformance was
partially driven by the relatively unpredictable trading
division.
WHAT WE WATCHED:
--DIVIDEND: As expected, Shell cut the dividend to $0.16 from
$0.47, as it had done three months ago. However, Russ Mould from AJ
Bell points out that Shell remains the third largest dividend payer
in the FTSE 100 index.
--IMPAIRMENTS: The company's headline results were significantly
hit by a $16.8 billion impairment relative to lowered medium- and
long-term price expectations. This was toward the lower end of the
$15 billion-$22 billion range previously provided by the oil
major.
--COST SAVING PROGRESS: Shell cut underlying operating expenses
by $2.23 billion to $18.34 billion in the first half of the year,
and is therefore on track to meet its target of reducing 2020
operating costs by $3 billion-$4 billion. In addition, capital
expenditure declined 21% to $8.59 billion in the period. The
company has pledged to decrease 2020 capital expenditure to $20
billion or below.
Write to Jaime Llinares Taboada at jaime.llinares@wsj.com;
@JaimeLlinaresT
(END) Dow Jones Newswires
July 30, 2020 07:13 ET (11:13 GMT)
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