PATNA (CoinChapter.com) — British oil giant Shell (SHEL.L) posted record third-quarter profits (adjusted) of $9.45 billion, more than doubling its profits from $4.1 billion in Q3 last year, per the Shell earnings report released on Oct 27.
Shell’s Q3 2022 was its second-highest profit-making quarter the history. Interestingly, the firm’s highest quarterly earnings came in Q2 2022, when the oil company raked in $11.5 billion in profits.
The oil giant’s earnings were consistent with Refinitiv analysts’ expectations of $9.5 billion.
Shell profits have already reached more than $30 billion in 2022, and it looks like the firm is on track to break its annual profit record set in 2008. Yet, ironically, 2008 was also a time of great economic turmoil.
“We continue to strengthen Shell’s portfolio through disciplined investment and transform the company for a low-carbon future. At the same time, we are working closely with governments and customers to address their short and long-term energy needs.“
Shell CEO, Ben van Beurden, said.Meanwhile, Shell announced plans to increase its stock dividend per share by about 15% for the fourth quarter of 2022. Shareholders will receive the increased stock dividend in Mar 2023. In addition, the oil giant will also start a share buyback program, likely resulting in an additional $4 billion in distributions.
The firm had reported consecutive record profits in the first two quarters of the year, with Shell Q3 2022 results marking an end to its record earnings. Shell blamed the recovery in global product supply for the lower refining margins.
Shell Stock Prices Jump On News
Meanwhile, Shell’s share price rallied upward after the earnings report’s release, with SHEL.L price closing on Oct 27 with gains of 5.85%. The jump brought Shell’s share price close to €28.54; a level SHEL.L price last reached in Aug 2019.
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However, trading on Friday opened at a price lower than Thursday’s close, though the Shell stock still seems to be a hot cake for traders. The shell share price has been uptrend for most of 2022, remaining above a multi-month ascending trendline.
Shell stock’s jump on Oct 27 also helped SHELL prices flip a multi-week descending trendline resistance.
Meanwhile, the uptrend has also pushed Shell’s relative strength index towards the overbought threshold, though the RSI is currently neutral with a value of 63.75 on daily charts. Traders consider an overbought RSI indicator of a bearish trend reversal.
A pullback could result in Shell share price testing support near the recently flipped descending trendline.
Joe Biden Asks Oil Companies To Cut Prices
On the other hand, President Joe Biden has criticized the oil companies’ record profits in light of the Shell earnings report.
Joe Biden highlighted that Shell had doubled its Q3 profits from 2021. Moreover, the president noted that the shell stock dividend increased, meaning that the profits would go to shareholders instead “shareholders instead of going to the pump and lowering the prices.”
President Joe Biden has repeatedly demanded that oil companies let go of buybacks and dividend increases. Rather, the firms should try to cut oil prices for American motorists. According to the motor club AAA, a gallon of gasoline costs $3.76 on average in the US.
However, the president drew flak from energy companies for his comments. Several industry experts pointed out that refiners were not responsible for setting the prices consumers pay at gas pumps.
Additionally, the American Petroleum Institute stated that Biden’s focus on the energy crisis was misplaced.
“[…]It’s time for Washington to focus on leveraging American energy production to confront the global mismatch between energy demand and available supply that has driven fuel prices higher.”
American Petroleum Institute told BloombergThe government might try to impose the so-called windfall profit taxes on energy companies, though past efforts have been unsuccessful, even when Democrats controlled both chambers of Congress.
Meanwhile, despite its record earnings, Shell has not paid any windfall tax in the UK. The firm stated that it was investing heavily in North Sea oil and gas producers. Shell said that the company had done enough in recent months to avoid the tax, which allows for tax relief in exchange for investments.
Chancellor Rishi Sunak introduced the windfall tax in May to check the astronomical profits of the oil and gas companies.
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