Royal Dutch Shell posted a 4 per cent fall in third-quarter current cost of supply (CCS) net profit today to $6.9 billion as underlying profit jumped sharply to beat even the highest forecasts.
One dealer said he expected Shell's shares to jump 50 pence on the news, while another suggested a 30 pence rise.
Shell's London-listed A shares closed at 1,789 pence on Wednesday. The CCS profit fall was due to the third quarter of 2005's earnings being boosted by divestment gains of $1.7 billion.
Stripping out one-off items such as asset sales and accounting adjustments, underlying profit rose to $7.0 billion in the third quarter from $5.8 billion in the same period last year.
The earnings surprise was partly due to stronger-than expected third-quarter production, which was 3.25 million barrels of oil equivalent per day (boepd). This was the same level as last year and well ahead of an average forecast of 3.146 million boepd.
Refining profits also came in much stronger than expected, rising around 25 per cent, excluding inventory gains, despite lower margins.