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Royal Dutch Shell (LON:RDSa) Plc slowed the pace of share buybacks as profit missed expectations, underscoring the pressure on Big Oil due to slumping natural gas prices and weaker refining.
The results set a gloomy tone for what is expected to be a broadly weaker set of quarterly results for the industry. The final months of last year saw gas trade at historic lows, while slowing economic growth shrank margins from making fuel and chemicals.
The Anglo-Dutch company first warned investors last quarter that it might not achieve its target of buying back $25 billion shares by the end of 2020. It reiterated that warning on Thursday and said the next tranche of share repurchases won’t exceed $1 billion, compared with $2.75 billion in the prior quarter.
“We remain committed to prudent capital discipline,” Chief Executive Officer Ben van Beurden said. “Our intention to complete the $25 billion share buyback program is unchanged, but the pace remains subject to macro conditions and further debt reduction.”
Adjusted net income for the fourth quarter was $2.93 billion, down 48% from a year earlier and falling short of the average analyst estimate of $3.15 billion.
Shell’s American peers Exxon Mobil Corp (NYSE:XOM). and Chevron Corp. (NYSE:CVX) are due to report results on Friday. Exxon has already warned that earnings will be weaker than expected, while Chevron has flagged up a write-down of as much as $11 billion.
European peers BP (LON:BP) Plc and Total SA (PA:TOTF) will release their figures next week.
(Updates with slower pace of buybacks in first paragraph.)