Shell raises its quarterly dividend as earnings outstrip analysts’ forecasts

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Royal Dutch Shell reported a 33 per cent increase in quarterly earnings yesterday, beating analyst forecasts despite impairments of almost $2bn after producing more liquids and selling at higher prices.

The Anglo-Dutch oil company also raised its quarterly dividend and said the value of its share buybacks and dividends for 2014 and 2015 would exceed $30bn.

Shell’s second-quarter earnings on a current cost of supplies basis excluding one-time items were $6.1bn, up 33 per cent from a year earlier. Analysts had expected earnings of $5.46bn. “The upstream number was good and the downstream number was better than expected,” said Jason Kenney, analyst at Santander, referring to Shell’s two largest divisions.

“Although downstream was still a weak number.”

“Across the business there are some very material writedowns. There may be even more writedowns to come,” said Kenney, who has a ‘hold’ rating on Shell’s shares.

The quarter’s earnings included a net charge of $1bn after tax with impairments of $1.943bn related mainly to gas assets in the United States.

The company joins rival BP in reporting better-than-expected earnings.

Chief executive Ben van Beurden is aiming to improve returns through selling assets and more selective project choices after a rare profit warning issued in January.

Shell announced a second-quarter 2014 dividend of $0.47 per ordinary share, up 4 per cent year on year and in line with analyst forecasts.