Royal Dutch Shell said Thursday that it's cutting shareholder dividends for the first time since World War II as the company reported a steep drop in quarterly profits.
Why it matters: The decision underscores how the coronavirus-fueled collapse in prices and demand is upending the oil landscape and forcing even the most powerful companies to scramble to protect their finances.
- Shell, which like other companies is also steeply cutting capital spending, said in announcing the dividend cut that "the deterioration in the macroeconomic and commodity price outlook" due to COVID-19 is "unprecedented."
- "The duration of these impacts remains unclear with the expectation that the weaker conditions will likely extend beyond 2020," the company warned.
Driving the news: Shell said it would reduce its first quarter dividend to 16 cents per share, a 66% cut. If that reduction is maintained all year, Shell will save about $10 billion, Reuters reports.
- The company reported $2.9 billion in Q1 net profits, which is down 46% from the same period a year ago.
What's next: U.S.-based multinational giants Exxon and Chevron report their earnings Friday.
Go deeper: Oil industry has more bleak days ahead as coronavirus crushes demand
