3.8 C
New York

Shell Shares Tumble After Profit Warning

Shares in Royal Dutch Shell dived by more than 4% in early trading after the oil firm warned of a “significant” profit miss.It cut its forecasts for earnings on a current cost of supplies basis to $2.9bn (£1.8bn) from market expectations of about $4bn, leaving full year results about 23% lower at $19.5bn (£11.9bn).Shell Shares Tumble

The company gave provisional, unaudited, figures of net profit of $1.8bn (£1.1bn) for the quarter, down from $6.7bn in the same period a year ago.

Shell blamed a mix of lower than expected production, higher than forecast costs and a worse than expected performance by its refining division.

The company’s new chief executive, Ben van Beurden, said the results were “not what I expect from Shell.”

It was his first update to investors – having only taken over the running of the Anglo-Dutch energy major two weeks ago ahead of the retirement of Peter Voser.

He added: “Our focus will be on improving Shell’s financial results, achieving better capital efficiency and on continuing to strengthen our operational performance and project delivery.”

The company said it had a “high level of maintenance activity” in the final quarter of 2013, disproportionately at its most profitable operations, including where it sells gas it has transformed to liquid form.

Earnings were also hurt by the weaker Australian dollar, its American production activities operating at a loss and by pipeline shutdowns in Niger, where vandalism has damaged output.

The profit warning fed into investor concerns about wider fourth quarter earnings following a slew of results in the US after-hours on Thursday which missed analysts’ forecasts.

The news saw Britain’s FTSE 100 – where Shell’s A and B shares together make up around 8% – open broadly flat, knocking upwards contributions from miners.

Latest news
Related news