Royal Dutch Shell Plc, which is on the brink of completing the oil
industry’s largest deal in a decade, said fourth-quarter profit fell 44
percent after the rout in crude prices deepened.
Profit adjusted
for one-time items and inventory changes shrank to $1.8 billion, near
the midpoint of the preliminary $1.6 billion-to-$1.9 billion range it
gave last month, Shell said Thursday.
That matches the $1.8 billion average estimate of 14 analysts surveyed by Bloomberg, and compares with profit of $3.3 billion a year earlier.
Crude’s collapse has slashed earnings for oil companies from Exxon Mobil Corp. to BP Plc, leaving them struggling to strike a balance between investing for growth and making shareholder payouts.
The Hague-based Shell is betting its $50 billion acquisition of BG Group Plc will help it maintain dividends and increase oil and gas production at a time when cash flow is shrinking.
“BG now becomes important for Shell because it helps them grow and high-grade their assets,” Brendan Warn, a London-based analyst at BMO Capital Markets, said by phone. “It gives Shell the opportunity to divest their high-cost assets and focus on BG’s high-margin projects.”
That matches the $1.8 billion average estimate of 14 analysts surveyed by Bloomberg, and compares with profit of $3.3 billion a year earlier.
Crude’s collapse has slashed earnings for oil companies from Exxon Mobil Corp. to BP Plc, leaving them struggling to strike a balance between investing for growth and making shareholder payouts.
The Hague-based Shell is betting its $50 billion acquisition of BG Group Plc will help it maintain dividends and increase oil and gas production at a time when cash flow is shrinking.
“BG now becomes important for Shell because it helps them grow and high-grade their assets,” Brendan Warn, a London-based analyst at BMO Capital Markets, said by phone. “It gives Shell the opportunity to divest their high-cost assets and focus on BG’s high-margin projects.”
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