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Energy giants slump in June quarter

The bloom has faded from the boom in energy company earnings as world prices and demand sag compared to the invasion-stimulated highs a year ago.

Oil giants, Shell and TotalEnergies, reported sharp falls in June quarter profits, and expectations are that giants like BP, Chevron, and Exxon Mobil will repeat the news in the next few days.

Shell posted adjusted earnings of $US5.1 billion for the three-month period to the end of June, missing analyst forecasts of $US6 billion.

The company reported adjusted earnings of $US11.5 billion and $US9.6 billion in the March quarter of this year.

Shell increased its quarterly dividend by 15% to 33 US cents a share, as announced in mid-June. It also announced $US3 billion in share buybacks, a program it expects to complete over the next three months.

It also lopped between $US1 to $US2 billion off its planned investment spending in the next year.

“At the end of the day, we have a balanced energy transition strategy. What we are looking to do is to be able to do the right things for now and for the future, both for our shareholders and for the planet,” Shell CEO Wael Sawan told CNBC on Thursday.

“We are focused on creating more value with fewer emissions,” Sawan said. “And what that means is we will continue to pull all the levers to drive further value growth in the organization, while at the same time, we will continue to meet our aggressive emissions reduction targets — both for our emissions and for our customers.”

French oil major TotalEnergies also reported weaker-than-expected earnings on Thursday, with a second-quarter adjusted result of $US5 billion, a 49% drop from the big profit that the company logged during the June quarter of last year.

TotalEnergies CEO Patrick Pouyanne said the firm’s “robust” earnings came during a “favourable but softening oil and gas environment.”

And a smaller major, the Norwegian oil and gas group, Equinor, revealed a 57% drop in June quarter earnings as oil and gas prices slipped from last year’s high levels.

Local majors, Woodside (ASX:WDS) and Santos (ASX:STO), have already hinted at likely significant drops in June quarter and half-year profits when they report next month.