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Shell 3Q Earnings Came Ahead of Market Consensus -- Earnings Review

10/29/2020 | 05:33am

By Jaime Llinares Taboada

Royal Dutch Shell PLC reported results for the third quarter on Thursday. Here's what you need to know:

NET PROFIT: The Anglo-Dutch energy giant posted a net profit of $489 million for the three months to Sept. 30, narrowing significantly from $5.88 billion a year earlier. However, the company's bottom-line performance beat the market consensus of a $722 million loss, taken from FactSet and based on five analysts' forecasts.

CCS EARNINGS EXCLUDING IDENTIFIED ITEMS: The adjusted profit on a current cost of supply basis--a figure similar to the net income that U.S. oil companies report, but strips out exceptional items--came in at $955 million. This was also above market expectations of $146 million, taken from Vara Research and based on 26 analyst estimates. Canadian bank RBC Capital Markets highlighted strong performances from the integrated gas and marketing segments.


--UPSTREAM: Shell's upstream division--which explores, produces, markets and transports hydrocarbons--booked a net loss of $1.11 billion, reflecting weak prices and lower production. In addition, the $884 million adjusted loss was worse than the market consensus of a $415 million loss, taken from Vara Research and based on 22 analysts' forecasts.

--COSTS: Shell reduced underlying operating expenses by $3.04 billion in the nine months to Sept. 30, whereas capital expenditure totaled $12.3 billion during the January-September period. This puts the company on track to comfortably meet its 2020 targets of slashing operating costs by between $3 billion and $4 billion, and keeping capex below $20 billion. "Our decisive actions taken earlier in the year have solidified our operational and cash delivery," Chief Executive Ben van Beurden said.

Write to Jaime Llinares Taboada at; @JaimeLlinaresT

(END) Dow Jones Newswires

10-29-20 0632ET

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