Shell misses earnings expectations amid call for its break-up

• Shell said Hurricane Ida had impacted adjusted earnings by almost $400 million

• Shell announced to set higher carbon reduction target for itself

Oil giant Royal Dutch Shell on Thursday missed third-quarter earnings expectations due to adverse impact of Hurricane Ida and global energy supply crunch.

The company posted adjusted earnings of $4.1 billion for the quarter, compared to analysts’ expectations of $6 billion, according to Refinitiv.

Shell reported adjusted earnings of $955 million for the same period last year, while posted $5.5 billion for the second quarter of 2021.

Earlier this month, the Anglo-Dutch company told its investors that Hurricane Ida in the Gulf of Mexico had impacted adjusted earnings by almost $400 million.

“This quarter we’ve generated record cash flow, maintained capital discipline and announced our intention to distribute $7 billion to our shareholders from the sale of our Permian assets,” Ben van Beurden, CEO of Shell, said in a statement.

Shell break-up

The earnings result comes a day after investor Dan Loeb hedge fund Third Point acquired major stake in Shell and asked the oil giant to break up in multiple companies.

Also Read: Hedge fund Third Point acquires majority stake in oil giant Shell: WSJ

Loeb argues that this would strengthen Shell’s performance and market value.

Shares of the company fell 3% during early morning trade in London.

Shell distributed 24 cents per share as dividends to the shareholders in the quarter.

Carbon reduction target

Shell announced to set higher carbon reduction target for itself as it pledged to cut absolute emissions from its operations and the electricity it uses by half by the end of the decade, when compared to 2016 levels.

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Shell also aims to become a net-zero carbon emissions company by 2050.

Earlier this year, a Dutch court had ordered Shell to take strict actions to reduce its carbon emissions. The court ruled that the energy major must reduce its emission by 45% by 2030.

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