Shell (RDS-A) Q4 Earnings Miss As Commodity Prices Fall

An Earnings Miss: Europe’s largest oil company Royal Dutch Shell plc (RDS-A - Free Report) reported earnings per ADS (on a current cost of supplies basis, excluding items – the market’s preferred measure) of 74 cents, below the Zacks Consensus Estimate of 80 cents.

Estimate Revision Trend & Surprise History: The stock had seen the Zacks Consensus Estimate for fourth-quarter earnings being revised 8% downward over the last 7 days.

Coming to earnings surprise history, the integrated energy company is on a solid footing, having gone past the Zacks Consensus Estimate in three of the last four reports, with the average positive surprise being 5%. This is shown in the chart below:

Royal Dutch Shell PLC Price and EPS Surprise

Royal Dutch Shell PLC Price and EPS Surprise

Royal Dutch Shell PLC price-eps-surprise | Royal Dutch Shell PLC Quote

Revenues Down: Revenues of $85.1 billion were 19% below the fourth-quarter 2018 sales of $104.6 billion.

Key Stats: Upstream segment recorded a profit of $778 million (excluding items) during the quarter, down 59% from the $1.9 billion (adjusted) achieved in the year-ago period. Shell’s upstream volumes averaged 2,813 thousand oil-equivalent barrels per day (MBOE/d), essentially unchanged from the year-ago period. At $56.60 per barrel, the group’s worldwide realized liquids prices were 5% below the year-earlier levels while natural gas prices were down 23%.

In the downstream segment – that focuses on refining, marketing and retailing – the Anglo-Dutch super-major reported adjusted income of $1.4 billion, 36% less than the year-ago period.

The Integrated Gas unit reported adjusted income of $2 billion, down 16% from the $2.4 billion in October-December quarter of 2018.

The oil major’s operating cash flow dropped 53% from the year-earlier level to $10.3 billion.

Buyback Plans: As part of the company’s $25 billion buyback program during the period 2018-2020, Shell will repurchase $1 billion worth of shares up to Apr 27 in the seventh installment.

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