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Shell Q1 Earnings Fall Slightly; Raises Asset Sales Target - Update

European oil giant Royal Dutch Shell Plc (RDS-A: Quote, RDSA.L, RDSB.L, RDS-B) on Thursday reported a small drop in first-quarter profit, even as revenues increased from last year amid higher oil prices. Stripping out inventory adjustments, profit grew from the year-ago period. The company also raised its asset sales target.

Income attributable to the company's shareholders decreased to $8.72 billion from $8.78 billion reported last year. Earnings per share fell to $1.40 from $1.42 a year ago. Income before taxation slipped 6 percent to $15.36 billion.

The company recorded net gains of $453 million and $198 million related to upstream and downstream earnings, respectively, and incurred a net charge of $271 million, mainly reflecting a tax provision. Earnings in the first quarter of 2011 included a net gain of $637 million.

On a CCS (current cost of supplies) basis, which excludes inventory gains or losses, quarterly earnings grew 11 percent to $7.66 billion. Excluding items, CCS earnings climbed 16 percent from last year.

Royal Dutch Shell CEO Peter Voser said, "Shell's first quarter 2012 earnings increased from year-ago levels, through a combination of improved operating performance, increased upstream volumes and strong oil prices."

Revenues climbed to $119.92 billion from $109.92 billion generated last year. Total revenue and other income rose to $123.77 billion from $114.84 billion.

Upstream earnings climbed 16 percent, as production edged up 1 percent to 3,552 thousand barrels of oil equivalent per day. Excluding the impact of divestments, exits and PSC price effects, production was 4 percent higher than last year.

Downstream CCS earnings grew 13 percent from last year. Oil products sales volumes slipped 3 percent from the prior year.

"Energy demand fundamentals are robust, but with near-term volatility in energy prices as a result of economic and political events. In downstream and North American natural gas we see continued challenges for our industry," Voser added.

In addition, the board announced a quarterly dividend of $0.43 per ordinary share and $0.86 per American Depositary Share, an increase of 2.4 percent compared to the first quarter 2011 US dollar dividend.

Shell also said asset sales for 2012 are likely to be over $4 billion compared to the earlier guidance of $2 billion to $3 billion.

RDSA.L is currently trading at 2,170.50 pence, up 42.50 pence or 2 percent, on a volume of 146,723 shares.

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by RTT Staff Writer

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