Beets, Buybacks, and Big Oil: Shell's Q1 Earnings Report - A Schrute Farms Analysis

Bears. Beets. Buybacks.

As Assistant Regional Manager of Dunder Mifflin and a volunteer sheriff's deputy I Dwight K. Schrute am uniquely qualified to analyze the recent financial performance of Shell Oil. One might ask what does a paper company man know about crude oil? Well I know more about resource management than Michael Scott knows about… well anything. And that's saying something. Shell's adjusted earnings came in at $5.58 billion for the first quarter surpassing analyst expectations. This is…acceptable. But is it beet acceptable? That remains to be seen. They beat expectations which frankly is the bare minimum. Just like showing up to work on time.

A 28% Decrease?! That's Insufficient!

Let's not gloss over the fact that earnings fell 28% compared to last year. A 28% decrease in beet production at Schrute Farms would send me into a beet fueled rage and believe me you wouldn't like me when I'm beet angry. This decline is simply… insufficient. What we need are results! Not this 'solid' nonsense. I suspect sabotage from a rival beet farmer – or perhaps another oil company. It's always the one you least expect. Even BP.

Share Buybacks: A Diversion?

Shell is engaging in what they call a 'share buyback program' – $3.5 billion to be exact. This is like giving Mose a new horse when the roof is leaking. It’s a temporary fix a distraction. They're trying to appease shareholders but a true leader invests in the future. Beets for example are a long term investment. They require dedication patience and the occasional fertilizer explosion. Buybacks however are a band aid on a larger issue. It is a weird way of making people spend money on their own company.

Weak Demand? Blame the Hippies

They blame 'weak demand outlook' and 'falling crude prices.' I blame the hippies! Their aversion to traditional values and internal combustion engines is a clear and present danger to the global economy! They need to embrace the power of petroleum and the efficiency of a well maintained sedan. And maybe cut their hair. It's a safety hazard around machinery. Also a certain past president and their “fast changing trade policy” is also to blame. They need some beet juice to get going.

Sawan's 'Solid' Results: Questionable

Shell CEO Wael Sawan describes these results as 'another solid set of results.' Solid? Solid is what you get when you freeze beet juice. These results are…lukewarm at best. This is 'false confidence,' as the great Michael Scott would call it. He needs to channel his inner Dwight Schrute and demand excellence not settle for mediocrity. Otherwise he needs to watch out because his job might get outsourced.

The Bottom Line: Prepare for Anything

The world is volatile. Just like beet prices during a rootworm infestation. We must be prepared for anything. Invest in resources. Learn a trade. Own a beet farm. And always always have a backup plan. Because as Sun Tzu said and I quote 'always have a backup plan'. Or maybe it was me who said that. Either way prepare for the worst but always strive for the best and always have a beet ready!