Shell’s Q4 performance
Royal Dutch Shell (RDS.A) released its fourth-quarter results on January 31.
In the fourth quarter, Shell’s revenues at $102.2 billion exceeded analysts’ estimates. Shell’s adjusted EPS was $1.4—compared to its estimated EPS of $1.3. Shell beat analysts’ EPS estimate. The company’s fourth-quarter adjusted EPS rose 15% YoY (year-over-year).
On January 31, Shell stock opened ~3% higher on the London Stock Exchange after the earnings release.
Shell’s fourth-quarter earnings review
Shell’s reported earnings rose from $3.8 billion in the fourth quarter of 2017 to $5.6 billion in the fourth quarter. The company’s adjusted earnings rose 32% YoY to $5.8 billion in the fourth quarter.
The higher earnings were due to a 44% YoY rise in integrated gas earnings mainly led by higher crude oil, natural gas, and LNG realizations. In the fourth quarter, Shell’s upstream earnings rose 14% due to higher realizations and volumes. Shell’s total hydrocarbon production rose 0.9% YoY to 3.8 million barrels of oil equivalent per day in the fourth quarter. The increase was mainly due to new project start-ups and existing project ramp-ups. The increase was partially offset by the impact of divestments.
Shell’s downstream earnings rose 53% YoY due to higher oil products (refining and trading and marketing) earnings. The increase was partially offset by lower chemicals earnings. Stronger refining margins in Canada supported the company’s refining earnings.
In 2018, Shell’s adjusted earnings rose 36% YoY to $21.9 billion. The Upstream, Downstream, and Integrated Gas segments had higher earnings YoY. Shell’s adjusted EPS rose 35% YoY to $5.1 in 2018.
Peers’ expected performance
Total (TOT) and BP (BP) are expected to post 13% and 27% higher EPS in the fourth quarter—compared to the fourth quarter of 2017. ExxonMobil (XOM) and Chevron (CVX) are expected to post 22% YoY and 160% YoY higher EPS in the fourth quarter. Suncor Energy’s (SU) earnings are expected to fall 40% YoY in the fourth quarter.