Shell share price dips even as group unveils buyback programme

Energy major’s second-quarter earnings miss estimates

Shell share price dips even as group unveils buyback programme

Shares in Royal Dutch Shell (LON:RDSA) have fallen into the red this morning even as the company announced that it was launching a $25-billion buyback programme. The update came as the Anglo-Dutch energy major posted its second-quarter results, with profits missing analyst expectations.

As of 08:27 BST, Shell’s share price had given up 1.36 percent to 2,688.00p. The stock is underperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.13 percent higher at 7,667.92 points. The group’s shares have added more than 28 percent to their value over the past year, as compared with about a three-percent gain in the Footsie.

Shell posts interim update

Shell announced in a statement this morning that its current cost of supplies (CCS) earnings attributable to shareholders excluding identified items had climbed 30 percent year-on-year to $4.69 billion in the second quarter. Reuters reports, however, that the result came in below a company-provided analysts’ consensus of $5.967 billion. The result is also below the $5.4 billion of CCS earnings reported in the first quarter of the year.

The Anglo-Dutch energy major noted that lower earnings in its Downstream segment had partly offset increased contributions from its Integrated Gas and Upstream units.

Group unveils share buyback

The FTSE 100 group separately announced a $25-billion share buyback programme, in line with expectations.

“Our financial framework remains unchanged. Our free cash flow outlook and the progress we have made to strengthen our balance sheet give us the confidence to start our share buyback programme,” the group’s chief executive Ben van Beurden said in the statement, adding that Shell’s intention “remained to buy back at least $25 billion of our shares over the period 2018-2020, subject to further progress with debt reduction and oil price conditions”.

As of 09:13 BST, Thursday, 26 July, Royal Dutch Shell Plc 'A' share price is 2,688.00p.

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