Shell profit doubles to $6.98 billion in third quarter on higher oil price, asset sales
AMSTERDAM - Royal Dutch Shell PLC, Europe's largest oil company, says profits doubled to nearly $7 billion in the third quarter because of higher oil prices and one-time gains.
Shell said Thursday net profit was $6.98 billion, up from $3.46 billion in the third quarter of 2010. Revenues rose 33 per cent to $127 billion.
Shell booked a net $245 million in various one-time gains, notably the sale of a refinery in Britain. That compares with net charges of $1.4 billion this time a year ago, mostly due to impairments on assets after an accounting review of its operations in Canadian heavy oil sands and its refining arm.
"Our third quarter results were higher than year-ago levels, driven by higher oil prices and Shell's performance," said Chief Executive Peter Voser in a statement.
The results were better than the $6.54 billion analysts polled by FactSet had expected, and shares rose 1.3 per cent to €26.24 in early Amsterdam trading.
The company did not mention any financial fallout from an oil spill at its Gannet Alpha platform in the North Sea.
"Whilst ongoing concerns around safety issues and government tax takes persist, these are currently outweighed by the strength of the company's operating performance," said analyst Richard Hunter of Hargreaves Lansdown Stockbrokers in a note on the earnings. He rates shares a Buy.
Global oil prices have risen 48 per cent from this time a year ago.
The company said its production earnings were $5.44 billion, up 58 per cent exluding one-time gains in both years.
Production fell 1.6 per cent to 3.01 million barrels of oil per day, but Shell said that would have been a rise of 2 per cent, comparing like for like. The company disposed of around 100,000 worth of production and its mature fields suffered declines, but it added 270,000 barrels of new production at projects in Qatar, Nigeria and Canada.
"Dare we say it but things appear to be going very smoothly for Royal Dutch Shell," said analyst Richard Griffith of Evolution Securities in a note on earnings. He also rates shares a Buy.
The company has been investing intensely in new capacity and plans to bring 20 new projects on line by 2014.
At Shell's "downstream" arm, which includes its refining activities, oil products and sales of chemicals, earnings increased 25 per cent to $1.81 billion, excluding one-time gains in both years. The company cited healthy margins on its chemical products, as refinery margins were unchanged and intake fell.