By Scott Kanowsky
Investing.com -- London-listed shares in Shell PLC (LON:SHEL) fell in mid-morning trading after the energy giant warned that lower refining margins will hit third-quarter earnings.
In a trading update on Thursday, Europe's largest oil firm said its indicative refining margin is now expected to come in at $15 per barrel during the period, down from $28 per barrel in the second quarter.
"[T]he decrease in margin is expected to have a negative impact of between $1.0B and $1.4B on the third quarter Adjusted [earnings before interest, tax, depreciation and amortization] for Products compared to the second quarter 2022," it said.
The group's indicative chemicals margin is also seen dipping to -$27 a ton versus $86 a ton in the prior three-month timeframe. The downturn will negatively impact quarterly core earnings at Shell's chemical unit by between $300M and $600M, the company said.
The announcement comes after rising prices for liquefied natural gas and crude oil earlier this year after the outbreak of the war in Ukraine helped Shell post record income.
Analysts at RBC called the statement "disappointing," adding that they now anticipate upcoming downgrades to consensus estimates.