Oil giant Royal Dutch Shell (NYSE:RDS.A) on Thursday reported weaker-than-expected third-quarter earnings as New York-based hedge fund Third Point called on the energy major to break up.
Shell also announced it had set itself a bigger carbon reduction target.
The Anglo-Dutch company posted adjusted earnings of $4.1 billion for the three months through to the end of September. That compared with $955 million over the same period a year earlier and $5.5 billion for the second quarter of 2021.
Analysts had expected third-quarter adjusted earnings to come in at almost $6 billion.
Shell issued a note to investors earlier this month warning that Hurricane Ida in the Gulf of Mexico likely had an aggregate adverse impact of roughly $400 million on adjusted earnings.
The company on Thursday said lower contributions from trading and optimization when compared to the second quarter had also impacted third-quarter results. This was only partly offset by a global energy supply crunch that has sent oil and gas prices soaring.
"This quarter we’ve generated record cash flow, maintained capital discipline and announced our intention to distribute $7 billion to our shareholders from the sale of our Permian assets," Ben van Beurden, CEO of Shell, said in a statement.
Billionaire activist investor Dan Loeb on Wednesday called on Shell to break up into multiple companies to strengthen its performance and market value.
His comments came shortly after it emerged that Loeb’s Third Point had built a stake of roughly $750 million in Shell, according to various media reports.
RDS.A shares fell $2.64, or 5.3% to $47.33.
