Jul 26, 2018

Shell, Total and ConocoPhillips report Q2 profit surge

Photo: Ben Stansall/AFP/Getty Images

Shell, Total, and ConocoPhillips, three of the world's largest oil-and-gas companies, both posted a sharp increase in second-quarter profits on Thursday as big oil's earnings season got underway — but Shell's performance fell short of analysts expectations, and its stock dipped slightly in pre-market trading.

Why it matters: The earnings reflect the strengthening of oil prices, which have been on a largely upward trend over the past two years, even as many companies have sought to keep costs restrained.

  • Shell said it's spreading the wealth to investors, announcing the launch of a $25 billion share buyback in 2018-2020.

Buzz: Per Bloomberg, Shell's repurchase program "should soothe investors who have grown increasingly anxious about when they’ll see the reward for sticking with Shell through the biggest oil-industry downturn in a generation."

By the numbers: Shell's second quarter profit was $4.7 billion, up 30% from the same period last year.

  • Total, meanwhile, saw an even sharper rise — the France-based multinational giant's Q2 profits jumped 44% to $3.6 billion on the strength of higher prices and higher output.
  • The company noted that Brent crude oil prices averaged $74 per barrel in the second quarter, which is 50% higher than the same period last year.
  • "Total benefitted fully from this by remaining focused on operational efficiency," Total CEO Patrick Pouyanne said in a statement alongside the results.

Meanwhile, Houston-based ConocoPhillips posted a $1.6 billion profit for Q2 Thursday, and now expects "to spend $6 billion this year to reflect a higher $65 per barrel price environment, Conoco said. It had initially budgeted $5.5 billion for 2018," per Reuters.

Go deeper, via The Wall Street Journal: "Shell Kicks Off Big Oil Earnings With Growth Spurt"

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First Lady Melania Trump, President Trump and India's Prime Minister Narendra Modi attend the "Namaste Trump" rally at Sardar Patel Stadium in Motera, on the outskirts of Ahmedabad, on Monday. Photo: Mandel Ngan/AFP via Getty Images

President Trump told a massive crowd at a rally in Ahmedabad, northwest India, Monday he hopes to reach a trade deal with his ""true friend" Prime Minister Narendra Modi during his two-day visit to the country "except he's a very tough negotiator."

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