Shell (RDS.A) Q4 Earnings Beat, Cash Flow Soars to $22B

An Earnings Beat: Europe’s largest oil company Royal Dutch Shell plc RDS.A reported earnings per ADS (on a current cost of supplies basis, excluding items – the market’s preferred measure) of $1.38, above the Zacks Consensus Estimate of $1.30 and the year-ago profit of $1.04.

Estimate Revision Trend & Surprise History: The stock had seen the Zacks Consensus Estimate for fourth-quarter earnings being revised 12.2% downward over the last 30 days.

Coming to earnings surprise history, the blue-chip company has a mixed record: its beaten estimates in two of the last four quarters, as shown in the chart below:

Revenues: Revenues of $104.6 billion were 18.7% above the fourth-quarter 2017 sales of $88.1 billion and also beat the Zacks Consensus Estimate of $86.9 billion.

Key Stats: Upstream segment recorded a profit of $1.9 billion (excluding items) during the quarter, up 14% from the $1.7 billion (adjusted) achieved in the year-ago period. Shell’s upstream volumes averaged 2,809 thousand oil-equivalent barrels per day (MBOE/d), 1% higher than the year-ago period. At $59.89 per barrel, the group’s worldwide realized liquids prices were 8% above the year-earlier levels while natural gas prices were up 30%.

In the downstream segment – that focuses on refining, marketing and retailing – the Anglo-Dutch super-major reported adjusted income of $2.1 billion, 53% more than the $1.4 billion earned in the year-ago period.

The Integrated Gas unit reported adjusted income of $2.4 billion, up 44% from the $1.6 billion in October-December quarter of 2017.

Moreover, the oil major’s operating cash flow soared 202% from the year-earlier level to $22 billion.

Buyback Plans: As part of the company’s $25 billion buyback program during the period 2018-2020, Shell will repurchase $2.5 billion worth of shares up to Apr 29 in the third instalment.

Zacks Rank: Currently, Royal Dutch Shell carries a Zacks Rank #5 (Strong Sell).

(You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.)

Check back later for our full write up on this Royal Dutch Shell earnings report later!

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