Shell Warns on Earnings, Cuts Production Outlook

Shell warned of significantly lower earnings in its integrated gas division and cut production guidance across its oil and gas segments.

- ADAM WHITTAKER

The London-based energy giant said Wednesday that it expects earnings from its core integrated gas division to fall significantly in the fourth-quarter compared with the previous one due to expiring hedging contracts. The division reported $2.87 billion in adjusted earnings in the third quarter.

In a trading update ahead of its earnings due on Jan. 30, Shell said it expects to book a noncash posttax impairment of between $1.5 billion and $3.0 billion owing to macroeconomic and operational changes.

The impairment includes an up to $1.2 billion charge in its renewables and energy solutions division. Cash flow from operations is also expected to take a $1.3 billion hit due to emission-permit payments in Germany and the U.S., which are normally payable in the fourth-quarter, the company said.