Royal Dutch Shell plc (ADR) (LON:RDSA) (NYSE:RDS.A) (NYSE:RDS.B) released its earnings report for the three months through September 2013 this morning before the market opened on Wall Street. The company showed earnings of $4.5 billion. The number missed expectations and is down a large amount from last year. The miss caused the company’s shares to slump by more than 4% on its home market in London this morning.
In the run up to the release of this earnings report analysts following Royal Dutch Shell plc (LON:RDSA) (NYSE:RDS.A) (NYSE:RDS.B) were looking for earnings per share of $5.3 billion from this morning’s earnings report. In the same three months of 2012 Shell managed to earn $6.6 billion. The company’s earnings were negatively impacted by a few factors including disruptions at Nigerian operations.
Reputed short-seller Spruce Point Capital Management released its latest short report this week. The firm is shorting Canadian dairy and grocery manufacturer Saputo. Spruce Point chief Ben Axler believes the company is entering a phase of declining growth and highlights the financial stress and growing challenges he sees it facing, not only in Canada but Read More
Royal Dutch Shell earnings
According to this morning’s earnings report Royal Dutch Shell plc (LON:RDSA) (NYSE:RDS.A) (NYSE:RDS.B) earnings were hampered by problems at Nigerian production plants, and margins at the company’s oil refineries. Total oil and gas production fell by around 2% around the world, and overcapacity in Europe was blamed for the fall in refining margins.
The total production in the three month period came to 2.931 million barrels of oil equivalent a day. Despite that number being down, Shell seemed to be optimistic about its line up for next year. The company’s guidance on investments came in much higher than analysts expected. The company said that CapEx would come in at around $45 billion for the full year. Analysts were expecting around $40 billion.
Royal Dutch Shell performance
The higher than expected capital expenditure means that earnings in the fourth quarter of the year will likely be hampered. That’s one of the major reasons that the company’s stock was falling on this morning’s market. Royal Dutch Shell plc (LON:RDSA) (NYSE:RDS.A) (NYSE:RDS.B) has been making major investments into natural gas, and those projects have yet to make real money for the firm.
The $45 billion expenditure in 2013 included acquisitions of liquified natural gas facilities and shale gas fields. Shell has defended its investment into the area and the company’s executives are insistent that the spending is in the best interests of the shareholders long term.
Investors have not been all that moved by the Royal Dutch Shell plc (LON:RDSA) (NYSE:RDS.A) (NYSE:RDS.B) story. The firm’s shares are down by close to 2% for the full year so far. The FTSE-100 gained more than 14% in the same period.