Shell’s lower than expected profits could make BP shareholders nervous
BP is due to reveal its second quarter profits next Tuesday, five days after its rival failed to meet analyst expectations
BP, the energy giant headed up by Irish man Bernard Looney, will be hoping it can avoid the fate of its rival Shell when it discloses how profitable it was in the second quarter of the year.
Analysts expect the oil giant to unveil billions of dollars in profit next Tuesday. But ahead of that, shareholders might be nervously eyeing Shell’s results announcement on Thursday.
Shell reported £3.9 billion in adjusted earnings, lower than the £4.3 billion that the company’s analysts had expected it to make. Analysts already expect BP to make less money, about £2.7 billion, in underlying replacement cost profit, but investors might hope that it will not miss those expectations.
Shell said that its profit had reduced due to it receiving lower prices for the oil and gas that it sells. The business also reported lower margins at its refining unit, sold less liquid natural gas (LNG) than the quarter before - LNG is generally more popular when it is winter in the northern hemisphere - and its LNG trading business also fared worse.
The fates of both companies often track each other closely. In May, both firms reported expectation-beating profits, Shell by £1.4 billion and BP by about £500 million.
Then, as now, their profits sparked calls for more to be done to ensure that the windfall from higher energy prices that were sparked by Russia’s full-scale attack on Ukraine does not benefit oil companies while ordinary people suffer.
