Oil major Shell (SHEL) has reported a 56% decline in its second-quarter profit to $5 billion U.S. due to a fall in crude oil and natural gas prices.
The earnings, which missed Wall Street forecasts, come after record earnings in 2022 as energy prices surged after Russia invaded Ukraine.
Analysts who follow the oil company were forecasting that Shell report a Q2 profit of $5.80 billion U.S.
In Q2 2022, Shell announced record quarterly earnings of $11.5 billion U.S. In this year’s first quarter, the company reported a profit of $9.65 billion U.S.
In reporting its latest results, Shell said it would repurchase $3 billion U.S. of its own stock over the next three months, down from $3.6 billion U.S. in the previous quarter.
The company reiterated that it is raising its quarterly dividend to $0.33 U.S. a share as previously announced in June.
The lower earnings reflect a decline in crude oil prices, which peaked at $122 U.S. a barrel in June 2022 but have since fallen to about $80 U.S. a barrel.
Prices for liquefied natural gas (LNG) fell to $11.75 U.S. per million British thermal units (mmBtu) from $33 U.S. in the year earlier quarter. Shell is the world's biggest LNG trader.
On a positive note, Shell announced that it reduced its debt to $40.3 billion U.S. during the second quarter, down from $44.2 billion U.S. in this year’s first quarter.
Shell’s stock was little changed in premarket trading on news of its latest financial results. Year-to-date, the company’s share price has risen 12% to $62.62 U.S. a share.
