Shell had its profit cut in half in Q2: here’s what CEO Sawan said today

Shell PLC (LON: SHEL) is in the red this morning after reporting a significant year-on-year decline in its second-quarter earnings.

Shell blames lower oil and gas prices

At $5.07 billion, its adjusted earnings not only came in down more than 50% versus a year ago but also missed Street consensus by about half a billion dollars.

Shell attributed the softness primarily to lower oil and gas prices. Still, on CNBC’s “Squawk Box Europe”, CEO Wael Sawan said today:

Other reasons cited for the earnings decline include lower volumes, lower refining margins, and a weakness in LNG trading and optimization.  

Shell launched a new buyback programme

Nonetheless, Shell said it will buy back $3.0 billion worth of its shares in the third quarter. According to the Chief Executive:

At the end of its Q3, the energy giant will likely launch a new stock repurchase programme of $2.5 billion at least, as per the press release.

On Thursday, it announced a quarterly dividend of $0.331 per share as well versus $0.25 per share a year ago. Shell stock is currently trading at the same price at which it started the year.

What else was noteworthy in Shell’s Q2 report

Other notable figures in the quarterly update include $15.13 billion in cash flow from operations – up 7.0%. Analysts had called for $14.62 billion instead. CEO Sawan added:

At $3.13 billion, net income noted a 64% year-over-year decline related partially to $1.7 billion worth of impairment charges and reversals.

Wall Street currently has a consensus “overweight” rating on the Shell stock.