This Big Oil Company Has More Cash Than It Knows What to Do With

Tyler Crowe, The Motley Fool


This past quarter, Royal Dutch Shell's (NYSE: RDS-A)(NYSE: RDS-B) results showed the company can fund just about anything it wants right now. A large capital expenditure program? Yup. Pay down some debt? Sure! Fund its dividend? Of course! How about a $2 billion share repurchase program on top of all of that? Why not! The reason it is able to do this is that the company is generating an almost unfathomable amount of cash right now. Shell's management said this was the most cash it has pulled in since the second quarter of 2008 when oil prices were in the $110-to-$120-per-barrel range. 

Let's take a look at the company's most recent earnings results and see what Shell is planning to do with all that cash coming in the door in the coming quarters.

By the numbers

MetricQ3 2018Q2 2018Q3 2017
Revenue$100.5 billion$99.3 billion$75.8 billion
Net income$5.84 billion$6.02 billion$4.09 billion
Earnings per ADS$1.40$1.44$1.00
Operating cash flow$12.09 billion$9.50 billion$12.09 billion


It's really hard to just sit in awe at Shell's cash flow results from the quarter. Perhaps even more incredible is that it generated that result with a large build of working capital in the quarter. According to management, cash flow for the quarter was $14.7 billion absent changes in working capital.

The surprising thing was that the company's net income results didn't quite follow suit compared with the....

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