Royal Dutch Shell plc (NYSE:RDS.A) (NYSE:RDS.B) (LON:RDSA) (LON:RDSB) released its latest quarterly earnings this morning. The company’s adjusted income was $4.6 billion, significantly lower than last year’s adjusted income of $5.7 billion. Analysts were expecting the oil giant to report adjusted income of $5.8 billion.

Royal Dutch Shell

In premarket trading in New York, both classes of shares were down by about 5 percent after the earnings were released.

Royal Dutch Shell blames higher costs, foreign exchange and sabotage

The company attributed the greater than expected decline in income to higher costs and problems with foreign exchange. Also the company saw serious problems with its Nigerian operations which involved the theft of oil and disruptions to its gas supply.

During the quarter, the oil giant invested $11.3 billion. Its net capital investment was $10.9 billion.

Shell reevaluates its holdings

Royal Dutch Shell plc (NYSE:RDS.A) (NYSE:RDS.B) (LON:RDSA) (LON:RDSB) said the problems in Nigeria cost the company an average of 100,000 barrels per day. It is currently reviewing its operations there and could sell leases for producing 100,000 barrels per day. The oil giant said the security problems in the country and the blockade of its natural gas joint venture there cost $250 million or more during the second quarter.

Other problems for the company were depreciation, increased write-offs for well exploration and the weakening Australian dollar. Royal Dutch Shell plc (NYSE:RDS.A) (NYSE:RDS.B) (LON:RDSA) (LON:RDSB) reported a write-down of approximately $2 billion for some of its natural gas assets in the U.S. Because of declining fuel prices, the oil giant is also reevaluating its holdings there.

Royal Dutch Shell returns capital to shareholders

Royal Dutch Shell plc (NYSE:RDS.A) (NYSE:RDS.B) (LON:RDSA) (LON:RDSB) also distributed $2.8 billion in dividends during the second quarter of the year. The oil giant has paid out over $11 billion in dividends and bought back more than $3 billion in shares over the last 12 months. It plans to buy $4 billion to $5 billion worth of additional shares yet this year.

The company declared a second quarter dividend of 45 cents per ordinary share and 90 cents per American Depository Share, which is a 5 percent increase from the same quarter a year ago.