Shell PLC (LSE:SHEL, NYSE:SHEL) shares fell in early trade in London after it announced a larger-than-expected decline in profits due to lower oil and gas prices.
The oil supermajor promised US$5.5bn of new share buybacks and increased its quarterly dividend 15% to US$0.33 to soften the blow.
Second-quarter post-tax profit, or net income, of US$3.1bn was reported, an 82% collapse from a year ago and 64% down on the first quarter, with income for the first half more than halving to US$11.9bn.
Adjusted earnings fell to US$5.07bn, below analyst expectations of US$5.61bn, and down 47% from the first quarter and 55% from a year ago.
Chief executive Wael Sawan said the company had been affected by lower oil and gas prices and refining margins, lower volumes and lower LNG trading & optimisation results.
But free cash flow of US$12.1bn in the second quarter was up from US$9.9bn in the first and relatively stable compared to a year ago.
So, as well as delivering the dividend increase promised to investors at its capital markets day last month, Sawan said the company was going further on buyback guidance by kicking off a US$3bn buyback for the next three months, with “at least US$2.5bn” at the third quarter results, subject to board approval.