Profit adjusted for one-time items and inventory changes advanced 14 percent from a year earlier to $1.8 billion, Shell said in a statement Thursday. Analysts had expected profit of $2.8 billion, according to the average of 17 estimates compiled by Bloomberg. The upstream, downstream and integrated gas businesses all missed company guidance.
The results follow similarly disappointing reports from U.S. peers Chevron Corp. and Exxon Mobil Corp., whose earnings fell well short of estimates. While drillers have responded to the 2 1/2-year oil-market rout by firing workers, selling assets and scrapping risky projects, the quarterly figures suggest the industry still needs recovery time, even with crude prices doubling since January 2016.
Shell’s oil and gas production totaled 3.91 million barrels of oil equivalent a day in the quarter, up 28 percent from a year earlier, according to the statement.
The company piled up borrowings following its $54 billion purchase of BG Group Plc. While Chief Executive Officer Ben van Beurden has made debt reduction a top priority, Shell missed its target for asset sales last year as low oil prices depressed valuations. The CEO this week announced the sale of fields in the North Sea and Thailand for as much as $4.7 billion to accelerate the disposals drive.
The company’s B shares, the most widely traded, rose 53 percent in London last year, the first annual gain in three. They’re down 5.6 percent this year.