Shell Shares Jumped Over 7% During Thursday’s Pre-Market after the Surprising Q3 Results

UTC by Steve Muchoki · 3 min read
Shell Shares Jumped Over 7% During Thursday’s Pre-Market after the Surprising Q3 Results
Photo: Depositphotos

During the third quarter that ended in September, Shell reported adjusted earnings of $955 million.

Multinational oil and gas company Royal Dutch Shell Plc (NYSE: RDS.A) shares jumped approximately 7.14% during Thursday’s pre-market to trade around $24.75. Shell shares closed Wednesday trading at $23.10 having dropped 4.51% during the day. Shell Q3 results were non-predictable.

Detailed Shell Q3 Results

The jump on Thursday is attributed to news that the company reported better than predicted Q3 results. Moreover, Shell announced that it would raise its dividend to its shareholders by approximately 4%. This will reciprocate to shareholders earning around 16.65 U.S. cents for the third quarter.

Notably, onwards the dividends will be calculated on an annual basis that will be subjected to Board approval. It was a relief for the Shell shareholders who have been on the bench for the past six months not receiving dividends.

However, Shell shares are still feeling the effect of the pandemic. Whereby they have dropped approximately 60.83% year to date, they are down 25.10% in the last three months, and down 4.70% in the last one month. The company has had to go the extra mile by selling part of its assets to keep its balance sheet healthy during the pandemic. Among the assets the company sold was the Appalachia shale gas for a whopping $541 million.

Shell and the Oil Industry

Apparently, the oil and gas industry has been one of the most hard-hit sectors of the economy during the pandemic as the demand hit lowest in years. With the demand low due to economic shutdown and the supply increased by oil producing countries during the pandemic, oil companies and the shareholders had to cope with the situation for an undetermined time frame.

In addition, the oil and gas industry is facing fierce competition from clean energy companies that are producing either electric vehicles or renewable energy products like solar panels. However, over the years Shell has not only been acquiring green energy companies but also heavily invested in renewable energy to bolster its future business.

The company had reported adjusted earnings of $638 million during the second quarter. Hereby indicating its sales have increased during the third quarter as global businesses awaken slowly. Having restarted its dividends payment process, the company is anticipating to use its cash flow to widen its revenue collection businesses.

“Our sector-leading cash flows will enable us to grow our businesses of the future while increasing shareholder distributions, making us a compelling investment case,” Ben van Beurden, CEO of Royal Dutch Shell, said in a statement.

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Steve Muchoki

A financial analyst who sees positive income in both directions of the market (bulls & bears). Bitcoin is my crypto safe haven, free from government conspiracies. Mythology is my mystery! "You cannot enslave a mind that knows itself. That values itself. That understands itself."

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