Shell share price heads south as earnings miss forecasts

Shares in Royal Dutch Shell (LON:RDSA) have fallen deep into the red in today’s session, even as the group posted a rise in third-quarter earnings as it benefitted from the oil price’s recovery. The Anglo-Dutch oil major further announced the second tranche of its buyback programme, with the group looking to buy back at least $25 billion of its shares by the end of 2020.

As of 08:25 BST, Shell’s share price had given up 1.74 percent to 2,457.00p, weighing on the benchmark FTSE 100 index which currently stands 0.21 percent lower at 7,113.39 points. The group’s shares have added nearly four percent to their value over the past year, as compared with about a five-percent fall in the Footsie.

Shell Q3 results

Shell announced in a statement this morning that its third-quarter earnings attributable to shareholders, based on a current cost of supplies (CCS) and excluding identified items had climbed 37 percent to $5.62 billion. Reuters, however, noted in its coverage of the news that the result fell short of a company-provided analysts’ consensus of $5.77 billion. 

The oil major explained that its earnings had primarily benefited from increased realised oil, gas and LNG prices as well as higher contributions from trading in Integrated Gas, partly offset by lower margins in Downstream, higher deferred tax charges in Upstream and adverse currency exchange effects.

“Good operational delivery across all Shell businesses produced one of our strongest-ever quarters,”

Shell’s chief executive Ben van Beurden commented in the statement, adding that the group’s strategy remained on track.

Buyback continues

Shell announced in a separate statement that it had completed its first tranche of its buyback programme on October 9, and was now launching the second tranche. The oil major plans to buy back at least $25 billion of its shares by the end of 2020, subject to further progress with debt reduction and oil price conditions.

As of 09:01 GMT, Thursday, 01 November, Royal Dutch Shell Plc ‘A’ share price is 2,443.00p.