London — Oil majors Royal Dutch Shell and BP both beat
expectations when they announced quarterly earnings on Tuesday, and both
announced spending cuts.
Shell posted an 18% rise in underlying net profit for the third quarter on Tuesday, but said next year’s capital spending would be at the bottom of the expected range.
BP reported a near halving in third-quarter earnings on Tuesday and trimmed 2016 spending by another $1bn as weak prices cut into profits, yet it still beat analysts’ estimates.
BP’s underlying replacement cost profit, the company’s definition of net income, fell to $933m, better than the $780m expected by analysts but much lower than the $1.8bn reported a year earlier.
"We remain on track to rebalance organic cash flows next year at $50-$55 a barrel," BP chief financial officer Brian Gilvary said in a statement.
BP said this year’s capital expenditure would fall to about $16bn, and to $15bn-$17bn in 2017.
Shell’s net income in the quarter, based on a current cost of supplies (CCS) and excluding exceptional items, rose to $2.8bn, which the company said compared with analysts’ expectations of $1.71bn.
Shell disappointed the market with its second-quarter results, the first full quarter following the completion of the BG acquisition in February, when it missed expectations by about 50%.
Shell said its 2017 capital spending was expected to be about $25bn, at the bottom of the range previously provided. This year’s capex will be about $29bn.
Reuters
Shell posted an 18% rise in underlying net profit for the third quarter on Tuesday, but said next year’s capital spending would be at the bottom of the expected range.
BP reported a near halving in third-quarter earnings on Tuesday and trimmed 2016 spending by another $1bn as weak prices cut into profits, yet it still beat analysts’ estimates.
BP’s underlying replacement cost profit, the company’s definition of net income, fell to $933m, better than the $780m expected by analysts but much lower than the $1.8bn reported a year earlier.
"We remain on track to rebalance organic cash flows next year at $50-$55 a barrel," BP chief financial officer Brian Gilvary said in a statement.
BP said this year’s capital expenditure would fall to about $16bn, and to $15bn-$17bn in 2017.
Shell’s net income in the quarter, based on a current cost of supplies (CCS) and excluding exceptional items, rose to $2.8bn, which the company said compared with analysts’ expectations of $1.71bn.
Shell disappointed the market with its second-quarter results, the first full quarter following the completion of the BG acquisition in February, when it missed expectations by about 50%.
Shell said its 2017 capital spending was expected to be about $25bn, at the bottom of the range previously provided. This year’s capex will be about $29bn.
Reuters
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