Shell Share Discussion Threads

[ps0u3165] 27/4/2018 07:16

Shell (NYSE:RDS.A) on Thursday reported that first-quarter earnings had soared 42 percent annually, reaping the benefits of higher oil prices and strong integrated gas performance, but disappointing with a weaker-than-expected cash flow generation.

Shell’s current cost of supply (CCS) earnings attributable to shareholders excluding identified items—its in-house metric for net profit—jumped to US$5.322 billion in Q1 2018, up from US$3.754 billion for the same period last year, and ahead of analyst expectations of US$5.2 billion.

This past quarter’s profit was the highest Shell has booked since the end of 2014. Higher oil and gas prices, strong performance in the integrated gas division, and improved profitability in the upstream helped Shell to post its best profit since the downturn began.

Lower refining margins and lower contributions from trading affected the downstream business whose profits dropped to US$1.687 billion in Q1 2018 from US$2.489 billion in Q1 2017, as higher oil prices make refining market conditions less favorable.

While Shell beat on profits—as widely expected due to the higher oil prices—its cash flow came in below forecasts and sent its shares down in London, Amsterdam, and New York today. Cash flow from operating activities in Q1 2018 dropped to $9.4 billion from $9.5 billion in the first quarter of 2017, although it recovered from the US$7.275 billion in Q4 2017 that had also missed forecasts.

Related: Are Investors Turning Away From Big Oil?

“I think the problem with the numbers this morning is that the cash flow generation was disappointing. The earnings were very strong but it didn’t get pulled through into cash generation,” Jason Gammel, equity analyst at Jefferies, told CNBC today.

CEO Ben van Beurden commented in Shell’s press release that “Our commitment to capital discipline is unchanged, we are making good progress with our $30 billion divestment programme and our outlook for free cash flow – which covered our cash dividend and interest this quarter and over the last year – is consistent with our intent to buy back at least $25 billion of our shares over the period 2018-2020.”

However, Shell’s CFO Jessica Uhl did not specify when the group would begin those buybacks, saying that the oil major would focus on cutting debt and paying dividends first.

By Tsvetana Paraskova for Oilprice.com

[waldron] 27/4/2018 06:36

Shell keeps rewards on hold


0






Friday, April 27, 2018 - 06:15 AM

By Kelly Gilblom

Royal Dutch Shell rode the surge in oil prices to even greater heights in the first quarter, posting a profit not seen since the days of $100 (€82.50) a barrel oil, but investors were displeased that the company didn’t take them along for the ride.

While French rival Total has started disbursing the rewards of rising energy prices with higher dividends and share buybacks, Shell has other priorities, at least for now.

Chief financial officer Jessica Uhl declined to say when her planned $25bn-$30bn stock-repurchase programme would start, saying she wanted to focus on debt reduction first. There are two big reasons for the company’s caution. First, it still has to pay off the acquisition of BG Group in 2016, a deal that has turbo charged natural gas earnings but left Shell heavily indebted.

Second, its cashflow which is little changed from a year earlier despite higher oil prices, “may not necessarily support” the planned buybacks, according to RBC Capital Markets.

Earnings at Europe’s largest energy company vaulted ahead of the upswing in crude to an average of $67 in the first quarter, reaping the benefits of years of cost cuts.

Adjusted net income was $5.32bn last quarter, compared with $3.75bn a year earlier. That surpassed analysts expectations of $5.2bn, rising to a level only consistently seen when oil traded for more than $100.

Total and Statoil also posted the best earnings in years this week, with Total pumping a record amount of oil and gas in the first quarter.

Shares of the French company rose in response to its results, the opposite of the reaction to Shell.

Shell dropped up to 2.8% as analysts raised concerns about flat cashflow from operations, which was $9.43bn in the first three months of 2018.

Shell’s free cashflow was sufficient to fund the company’s cash dividends and interest payments in the first quarter, which wasn’t always the case during the oil-price slump.

Like its peers, Shell was forced to make some payments to investors in shares during the downturn, via a scrip dividend, while also borrowing to fund the cash portion of the payout.

Barclays analysts expect Shell to begin its share buyback programme in the second half. “We would expect cashflow growth through the year supported by the current macro environment,” said Biraj Borkhataria, an analyst at RBC Capital Markets.

- Bloomberg

[oilretire] 27/4/2018 05:58

$25 Billion share buyback?? It's mentioned again here.

As a side, I wonder what the equivalent would be as a special divvy return?




Ms Uhl reiterated Shell’s intention to return $25 billion or more to investors through share buy backs by the end of 2020

[fjgooner] 26/4/2018 23:51

DD,

Nope - all is well.

Jessica confirmed in her 90 minute web cast this afternoon that the full $25 Billion of share buybacks will be completed between now and the end of 2020. And that is quite clearly over just 2 years and 8 months.

What will that do for the value of shares?

I think we all know.

Currently RDSB shares are extremely cheap.

I still expect £27 before ex-dividend date in a few days' time.

FJ

[discodave4] 26/4/2018 23:23

Am I missing something here?The market didn't like the free cash flow being $6 million down on Q1 last year but the Company have stated they will be buying back shares up to $25 billion over the next 2 years.......wtf are they concerned about?.DD

[petepitstop] 26/4/2018 18:17

I think the sweet spot is probably a little higher at around 65USD but will be a moving target over time as margins improve and new energies come into play. Shell is becoming less reliant on the oil price by the quarter. It is moving from an income play to a growth and income play with time and exponential technological benefits.

[waldron] 26/4/2018 17:52

CHUCKLE

CLEVER GIRLFRIEND


FORSEE TOMORROW A MOVE BACK INTO THE 2575 to 2675 BOX

THEN A BREAK OUT THRU 2675 AND THEN THE USUAL FALLBACK TOWARDS 2475

[sogoesit] 26/4/2018 17:06

Indeed and in the same vein as a girl-friend once said: "Never start something you won't be able to finish!"
;-)

[waldron] 26/4/2018 17:06

Total
51.94 +1.54%



Engie
14.39 +1.48%

Orange
15.01 +1.62%



FTSE 100
7,418.07 +0.53%
Dow Jones
24,259.12 +0.73%
CAC 40
5,453.58 +0.74%




BP
535.3 +2.16%



Shell A
2,502.5 -1.03%



Shell B
2,569 -0.73%



Brent Crude Oil NYMEX 73.56 +0.33%
Gasoline NYMEX 2.10 +0.33%
Natural Gas NYMEX 2.83 +0.57%

[waldron] 26/4/2018 17:05

TWH

CLEVER GRANDMA

FINISH THE TASK BOY

[the white house] 26/4/2018 16:29

Up 45 since 10am, as my granny used to say 'it doesn't matter how you start it's how you finish'

[maywillow] 26/4/2018 12:27

High Oil Prices Boost Industry Earnings, but Investors Remain Wary -- Update
26/04/2018 12:14pm
Dow Jones News

Shell A (LSE:RDSA)
Intraday Stock Chart

Today : Thursday 26 April 2018
Click Here for more Shell A Charts.

By Sarah Kent

LONDON -- Rising crude prices are supercharging earnings at the world's major oil firms, but investors may need more convincing that Big Oil is back.

Sharply climbing oil prices -- and years of cost cutting when they were low -- are rewarding some of the world's largest oil producers with profits not seen since crude was trading around $100 a barrel. Despite that, investors remain wary. As the industry emerges from a long and painful few years of low prices, shareholders are pressing executives to keep spending in check and funnel free cash to shareholders.

Royal Dutch Shell PLC reported Thursday its highest quarterly profit since 2013, when prices were peaking just ahead of a steep downdraft to about $25 a barrel. Today, international crude is back comfortably above $70 a barrel, and oil companies have enjoyed three months of strong pricing for their crude.

The Anglo-Dutch oil giant said its first-quarter profit on a current cost-of-supplies basis -- a number similar to the net income that U.S. oil companies report -- rose 69% from a year earlier to $5.7 billion. The company delivered more than $5 billion in free cash flow -- a newly important metric for investors who grew concerned about big oil companies' ability to finance their generous dividends during recent years of lower oil prices.

Underscoring the still-skittish sentiment, though, Shell shares were down 2.5% in London morning trading after operating cash flow came in below analysts' expectations.

Shell is the biggest oil company yet to report results for the quarter -- a period when the industry will be under a microscope. After years of retrenchment, investors are expecting companies to deliver them billions of dollars in cash, buoyed by rising oil prices and stringent cost cuts.

Pressure remains on firms to keep spending constrained. Executives have signaled that despite the heady oil prices, they will keep costs in check and spin out cash to investors, instead of betting the gains on new expensive but risky oil-field investments.

"They just need to stick to their knitting," said Rohan Murphy, energy analyst at Allianz Global Investors, a Shell investor. He said the company's leadership needs to "show that they're not going to start spending willy-nilly again."

France's Total SA also reported first-quarter earnings Thursday, beating expectations for profit after stripping out one-off items. The company's production rose to record levels.

But net profit slipped 7% compared with a year earlier, suffering from a tough comparison a year earlier, when it booked a big gain from an asset sale. Higher oil prices also acted as a double-edged sword for Total, adding to costs and crimping margins at its refining operations.

Shares in Norway's Statoil ASA fell nearly 3% Wednesday after its profit numbers missed expectations. High crude prices boosted earnings and cash flow at the company, too, but results suffered from higher depreciation expenses in Norway and weaker earnings from the company's trading and refining unit.

Exxon Mobil Corp. and Chevron Corp. are set to disclose their first-quarter results Friday. BP PLC reports next week. All three are expected to generate higher profits and lots of cash.

Total on Thursday raised its first-quarter interim dividend 3.2%, in line with plans announced in February. It has targeted increasing shareholder payouts 10% over the next three years.

Shell said it is on track to buy back at least $25 billion worth of shares by 2020, but gave no indication when the previously flagged program would begin. Some investors were hoping for more clarity on those plans.

Statoil has also held up the prospect of a buyback, but didn't provide new details about timing this week.

"We still see emerging scope for buybacks but it would depend on the macro environment," Statoil Chief Executive Eldar Saetre said in an interview. "We see a lot of volatility."

Write to Sarah Kent at [e-mail]



(END) Dow Jones Newswires

April 26, 2018 06:59 ET (10:59 GMT)

[maywillow] 26/4/2018 12:27

High Oil Prices Boost Industry Earnings, but Investors Remain Wary -- Update
26/04/2018 12:14pm
Dow Jones News

Shell A (LSE:RDSA)
Intraday Stock Chart

Today : Thursday 26 April 2018
Click Here for more Shell A Charts.

By Sarah Kent

LONDON -- Rising crude prices are supercharging earnings at the world's major oil firms, but investors may need more convincing that Big Oil is back.

Sharply climbing oil prices -- and years of cost cutting when they were low -- are rewarding some of the world's largest oil producers with profits not seen since crude was trading around $100 a barrel. Despite that, investors remain wary. As the industry emerges from a long and painful few years of low prices, shareholders are pressing executives to keep spending in check and funnel free cash to shareholders.

Royal Dutch Shell PLC reported Thursday its highest quarterly profit since 2013, when prices were peaking just ahead of a steep downdraft to about $25 a barrel. Today, international crude is back comfortably above $70 a barrel, and oil companies have enjoyed three months of strong pricing for their crude.

The Anglo-Dutch oil giant said its first-quarter profit on a current cost-of-supplies basis -- a number similar to the net income that U.S. oil companies report -- rose 69% from a year earlier to $5.7 billion. The company delivered more than $5 billion in free cash flow -- a newly important metric for investors who grew concerned about big oil companies' ability to finance their generous dividends during recent years of lower oil prices.

Underscoring the still-skittish sentiment, though, Shell shares were down 2.5% in London morning trading after operating cash flow came in below analysts' expectations.

Shell is the biggest oil company yet to report results for the quarter -- a period when the industry will be under a microscope. After years of retrenchment, investors are expecting companies to deliver them billions of dollars in cash, buoyed by rising oil prices and stringent cost cuts.

Pressure remains on firms to keep spending constrained. Executives have signaled that despite the heady oil prices, they will keep costs in check and spin out cash to investors, instead of betting the gains on new expensive but risky oil-field investments.

"They just need to stick to their knitting," said Rohan Murphy, energy analyst at Allianz Global Investors, a Shell investor. He said the company's leadership needs to "show that they're not going to start spending willy-nilly again."

France's Total SA also reported first-quarter earnings Thursday, beating expectations for profit after stripping out one-off items. The company's production rose to record levels.

But net profit slipped 7% compared with a year earlier, suffering from a tough comparison a year earlier, when it booked a big gain from an asset sale. Higher oil prices also acted as a double-edged sword for Total, adding to costs and crimping margins at its refining operations.

Shares in Norway's Statoil ASA fell nearly 3% Wednesday after its profit numbers missed expectations. High crude prices boosted earnings and cash flow at the company, too, but results suffered from higher depreciation expenses in Norway and weaker earnings from the company's trading and refining unit.

Exxon Mobil Corp. and Chevron Corp. are set to disclose their first-quarter results Friday. BP PLC reports next week. All three are expected to generate higher profits and lots of cash.

Total on Thursday raised its first-quarter interim dividend 3.2%, in line with plans announced in February. It has targeted increasing shareholder payouts 10% over the next three years.

Shell said it is on track to buy back at least $25 billion worth of shares by 2020, but gave no indication when the previously flagged program would begin. Some investors were hoping for more clarity on those plans.

Statoil has also held up the prospect of a buyback, but didn't provide new details about timing this week.

"We still see emerging scope for buybacks but it would depend on the macro environment," Statoil Chief Executive Eldar Saetre said in an interview. "We see a lot of volatility."

Write to Sarah Kent at [e-mail]



(END) Dow Jones Newswires

April 26, 2018 06:59 ET (10:59 GMT)

[zho] 26/4/2018 11:26

Broker comments at

[fjgooner] 26/4/2018 11:21

Very happy with these strong results. The share price will sort itself out soon enough.

[champian] 26/4/2018 10:53

There is no way to please this market, Every which way you lose.
Only stock that gets share price up after results are those that are heavily sold off.

[whiskeyinthejar] 26/4/2018 09:58

Shell Profit Soars on Oil Recovery -- 2nd Update

By Sarah Kent
LONDON -- Royal Dutch Shell PLC on Thursday reported its highest quarterly profit since 2013, as higher oil prices and years of cost cutting boosted earnings.

The Anglo-Dutch oil giant said its first-quarter profit on a current cost-of-supplies basis -- a number similar to the net income that U.S. oil companies report -- rose 69% from a year earlier to $5.7 billion.

The company delivered more than $5 billion in free cash flow -- a newly important metric for investors concerned about big oil companies' ability to finance their dividends after the oil price collapsed in 2014.

In a sign of how important cash-flow numbers have become, Shell shares opened down roughly 2% in London after its operating cash flow of $9.4 billion missed expectations.

The company also stopped short of launching an anticipated $25 billion share buyback program, though it is still on track to repurchase at least that much stock by 2020.

Shell is the biggest oil company yet to report results for the quarter -- a period where the industry has everything to prove. After years of retrenchment, investors are expecting companies to deliver billions of dollars in free cash flow, buoyed by rising oil prices and stringent cost cuts.

Exxon Mobil Corp. and Chevron Corp. are due to publish their first-quarter results Friday. BP PLC reports on May 1.

[the white house] 26/4/2018 09:46

Great results, just a few short term players getting out after 6 days up on the spin. Anyone that was in just 10 days ago is still a sov upEvery month that passes at these 70 Brent levels (74 today)is a future bonus. Thank FJ to your continuing stats and we can see that next Q figures will be based on at least 70 unless we get a 5 dollar drop that lasts for a month. All the future trading deals require less panic and maybe little or no involvement?In answer to the earlier comment that the divi has remained the same, not for me it hasn't as I pressed up last week my payout will be higher...I wonder who is the longest holder on here & price they paid which will highlight the old adage...!?

[fangorn2] 26/4/2018 09:11

Think it is this Imperial...

"'The outlook for Q2 is muted though, with the group expecting lower Upstream volumes, weaker refinery availability due to maintenance, and a lower pace of growth in the gas business"

[imperial3] 26/4/2018 09:10

Is it that they have not increased the dividend has spooked the market?