Royal Dutch Shell plc (ADR) (RDS.A) Declares Great Results, Faces Risks in Russia

Royal Dutch Shell plc (ADR) (NYSE:RDS.A) announced its second quarter results today, the company performed well in the quarter, beating analyst expectations by a good margin. The company posted second-quarter earnings of $5.1 billion on a current cost of supplies (CCS) basis on, up from $2.4 billion in the same quarter a year earlier. Royal Dutch Shell plc (ADR) (NYSE:RDS.A) also announced a second-quarter 2014 dividend of 47 cents per ordinary share.

Royal Dutch Shell plc (ADR) (NYSE:RDS-A)

Bloomberg’s Ryan Chilcote broke down the earnings of Royal Dutch Shell plc (ADR) (NYSE:RDS.A) and discussed the underlying risks that the company faces in Russia.

“[...] Profits beating $6 billion, the estimate was at around $5.5 billion, profit up by 33%, that’s why the stock is up. They are pushing ahead with the restructuring program. There has been a problem in the United States, they are sorting that problem out, they took a write down of just close to $2 billion. But, Russia is an interesting one, they didn’t say anything about Russia in their statement,” Chilcote said.

Chilcote believes that companies that do business in Russia really need to think about how they approach disclosures as most of the companies have refrained from speaking much about their business in the country while reporting their earnings and even otherwise. Royal Dutch Shell plc (ADR) (NYSE:RDS.A) has assets worth $7 billion in Russia and it works closely with Russian company Gazprom in Russia’s only LNG project. Given the kind of recent sanctions that have been imposed by the U.S. and European Union on Russia for its role in Ukraine, oil companies like Royal Dutch Shell plc (ADR) (NYSE:RDS.A) can see some repercussions due to that.

“[...] If Russia goes to the oil companies that it’s working with and starts seizing their assets, logic would dictate that they wouldn’t want to do that, because they recognize that the sanctions are politically motivated and is last thing that, say ,Exxon or Shell that they work closely with, or BP, wants are these sanctions,” Chilcote added.

Disclosure: None

Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

The 10 Most Expensive iPhone Apps

The 9 Most Expensive Designer Shoes in the World

The 10 Most Expensive Cigarette Brands

The 10 Most Expensive Law Schools in the US

The 10 Best Wall Street Movies

The 10 Most Expensive Golf Clubs Ever Sold

The 10 Most Expensive Golf Memberships

The 10 Best Disney Characters Ever Created

The 8 Best Foods for Gaining Weight

The 10 Most Expensive Colleges in the World

The 7 Most Memorable Ad Campaigns of All Time

The 7 Most Expensive High Schools in the World

The 10 Electric Vehicles with the Longest Range

The 10 Cities with the Worst Drivers in the World

The 10 Most Expensive Dresses Ever Created

10 Islands to Visit Before You Die

10 Famous Celebrities Who Needed Rehab

The 15 Countries with the Largest Oil Reserves

The 10 Most Overused Excuses in the World

The 5 Best iOS Apps You Can’t Get on Android

5 Companies Damaged By Social Media Blunders

The 10 Most Legendary Blues Songs

The 10 Most Lawless Places in the World

4 Reasons China is a Threat to the US

The 17 Most Sugary Drinks in the World

The 10 Most Ruthless Rulers in History

The 10 Greatest Generals in History

Top 8 Travel Destinations for 2015

The 10 Safest Dog Breeds for Children

The 10 Most Stolen Vehicles in the US

The 7 Most Expensive Celebrity Weddings

The 10 Best LoL Teams in the World

Top 10 Worst Marketing Campaigns Ever Produced

Top 5 Diets that Help You Lose Weight

The 10 Best Ways to Stay Awake

7 Artists That Switched Musical Genres

The 10 Most Expensive Cities to Live in New Jersey

The 10 Best High Schools in New York

The 10 Countries With the Least Gender Inequality

The 6 Biggest Musician-Manager Feuds

The 10 Countries with the Cheapest Gas Prices

The 7 Most Theatrical Bands of All Time

The 8 Worst Band Breakups of All Time

The 10 Most Important South American Leaders

The 7 Most Successful Casting Show Winners

The 10 Most Peaceful Countries in the World

5 Big Reasons Communism Failed

The 15 Most Famous Carl Icahn Quotes

10 Scary Animals that are Actually Harmless

The 8 Most Famous Singer-Actors in Entertainment

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!