Oil Giant Shell Tweaks Q4 Outlook, Shocks Shares With Around $4.5B Impairment Charge
Portfolio Pulse from Lekha Gupta
Shell PLC (NYSE:SHEL) announced a revision to its Q4 FY23 operational outlook, leading to a decrease in share price. The company adjusted its production and sales volume guidance across various segments, including Integrated Gas, Upstream, and Marketing. Notably, Shell disclosed impairment charges estimated between $2.5 billion to $4.5 billion for Q4, primarily due to macroeconomic factors and portfolio decisions, such as the Singapore Chemicals & Products assets. This announcement comes ahead of the Q4 FY23 results expected on January 8, 2024. Previously, Shell reported a Q3 FY23 revenue decline of 20.3% year-over-year, missing consensus estimates.
January 08, 2024 | 11:13 am
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Shell PLC revised its Q4 FY23 outlook and reported expected impairment charges of $2.5B to $4.5B, causing its shares to trade lower.
The revision of the Q4 outlook and the significant impairment charges are likely to negatively impact investor sentiment in the short term, leading to a potential decrease in Shell's share price. The impairment charges, which are substantial, indicate a negative adjustment to the company's assets and earnings, which typically results in a bearish outlook for the stock.
CONFIDENCE 85
IMPORTANCE 90
RELEVANCE 100