LONDON (CNNfn) - Royal Dutch/Shell posted a 118 percent jump in first-quarter earnings on Thursday as the combination of restructuring and higher energy prices buoyed the world's third-largest publicly-traded oil and gas company.|
The Anglo-Dutch firm said current-cost net income, a standard measure of oil company profitability, rose to $3.13 billion in the quarter ended Mar. 31 from $1.44 billion a year earlier. It also hit its targeted return on capital of 14 percent, up from just 1.9 percent for the same period of 1999, when oil prices languished at less than half of their value during the first few months of 2000.
The result was at the top end of estimates among analysts polled by Reuters, which ranged from $2.5 billion to $3.3 billion.
The company's "upstream" exploration and production business posted record current-cost profit of $2.3 billion for the quarter, a three-fold increase on the year-ago period. Shell said its average crude oil price in the first quarter was $26.95, up 138 percent from a year earlier.
With exploration and production costs slashed by an 18-month restructuring program, Shell said it remained confident it would meet its full-year cost-saving targets.
The "downstream" business remained the weak spot, with overcapacity in the global oil refining market cutting the division's current-cost earnings by 8 percent to $467 million. However, earnings at its chemicals arm rose 171 percent.
Shares in Shell Transport & Trading, (SHEL) the firm's London-listed arm, rose 1.6 percent to 512 pence after the earnings announcement.
Rival BP Amoco (BPA) reports its first-quarter earnings on May 9.