LONDON – Royal Dutch Shell PLC (RDSA) Thursday reported a sharp increase in net profits in the first quarter, capping off a bumper set of results for the world's biggest oil companies as years of cost-cutting and a fragile recovery in oil prices begin to pay off.
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Shell said its quarterly profit on a current cost-of-supplies basis--a number similar to the net income that U.S. oil companies report--soared to $3.4 billion in the first three months of the year, up from $814 million for the same period in 2016. Cash flow from operating activities grew to $9.5 billion, compared with $700 million in the first quarter of 2016, strengthening a metric that has been closely watched by investors worried about their dividends.
The company's performance mirrors a strong improvement in earnings across the major oil companies in the first quarter, leaving investors hopeful that the companies may finally be on the path to recovery following a precipitous drop in oil prices since the summer of 2014.
Last week, Exxon Mobil Corp. (XOM) reported its best quarter since 2015. Chevron Corp. (CVX), France's Total SA (TOT) and BP PLC (BP) have also all reported a sharp increase in profits for the first quarter.