Shell reported its first quarter earnings for FY15 today and posted net $3.24 billion in net income and $71.5 billion in revenue.
Royal Dutch Shell plc announced its first quarter earnings for fiscal year 2015 on Thursday April 30. The company reported adjusted net income of $3.24 billion equals to $1.03 per share surpassing $2.48 billion or 81 cents of consensus estimate.
The company's earnings witnessed over 56% decline compared to $7.32 billion earnings in the similar quarter previous year. The decline was mainly due to more than 50% decline in the prices of crude oil since June2014.
The upstream earnings for the company declined by 88% compared to prior year quarter. Shell quarter reported $675 million of upstream earnings, declined from $5.7 billion last year. The company reported $1.9 billion one time gain resulting from its Nigeria asset sales and the lower taxes imposed by UK on the oil & gas assets in the North Sea.
The company posted $71.5 billion in revenue less than $109.5 billion reported in similar quarter in 2014.
However, the significant decline in prices of crude oil has damaged earnings and revenues; the downstream division together with its trading partner has supported to prevent the earnings of company from further decline. The downstream business division profits went up by 66% YoY to a$2.65 billion.
Because of declining crude oil prices, Shell stood by its plan of cutting costs and assets sell. In 2015, the company divested assets worth of $2 billion. It is also cutting its onshore operations in Nigeria too. The oil company has also looking to cut capital expenditures by over $2 billion to $33 billion this year.
The company has commenced only 6% investment cut. In contrast, other large oil companies have assimilated 10% to 15% cut in their overall spending. Shells production of oil and gas also gone down by 2% Year over year and reached $3.2 million barrels of oil equivalent a day
Shell concluded its decision to buy BG Group Plc. in a merger deal worth of $70 billion. The merger is most likely to stimulate financial growth of the company and will help to improve its assets base.
The company has also certain to maintain its dividend payout at $0.47 a share. Shell stock is down by 0.19% to $63.50% at market close on Wednesday April 29.