Shell Posts Q2 Adjusted Profit Beat Despite Declining Refining Margins

Shell (SHEL) on Thursday reported higher-than-forecast second-quarter adjusted earnings, although refining margins at the energy giant dropped from the prior quarter.

The company posted adjusted earnings per share (EPS) of $0.99, which beat analysts’ consensus estimate of $0.91, per Visible Alpha. The European oil-and-gas firm also announced a $3.5 billion share buyback program, which is expected to be completed by the Q3 results announcement.

However, refining margins fell to $8 a barrel in the second quarter from $12 a barrel in the first.

Refining Margin Declines Weigh on Oil Industry

Oil giants have been hit by a downturn in refining margins. Rival BP (BP) on Tueday said “significantly lower realized refining margins” impacted its Q2 results. ExxonMobil (XOM), which reports second-quarter results Friday, said in early July that weaker margins and decreased gas prices compared with the first quarter will weigh on results.

Shell American depositary receipts (ADRs) fell 1% to $72.47 as of 11:30 a.m. ET Thursday but are up around 10% this year.