- Royal Dutch Shell (LON:RDSa) (NYSE:RDS.A) -0.9% premarket as otherwise strong Q4 results are marred by a 21% Y/Y drop in free cash flow to $7.25B, lower than expected and the weakest since 2016.
- “Resilient earnings do not appear to have translated into cash generation,” RBC Capital analyst Biraj Borkhataria says. “This result leaves gearing falling by less than we expected” and could dampen hopes of a share buyback program in the very near term.
- Shell says its gearing fell to 24.8% from a peak of 29.2% in Q3 2016 as it cut its debt to $74.65B; for the full year, it generated nearly $28B in free cash flow and reduced its net debt by $8B.
- For the full year, cash flow from operations rose to $35.65B from $20.62B a year earlier, putting Shell on track to beat Exxon Mobil (NYSE:XOM), which is forecast to have generated $32.6B in 2017, according to estimates by Jefferies analysts.
- Q4 oil and gas production edged higher to 3.756M boe/day from 3.657M boe/day but fell 4% Y/Y due to asset sales.
- Now read: 2 Things That Will Drive Exxon Mobil's Cash Flow And Earnings In 2018
Original article