Saudi Aramco Third-Quarter Profit Slips on Lower Crude Prices

​Saudi Arabia's Aramco, the world's top oil exporter, reported a 2.3% fall in quarterly profit on Tuesday, citing a drop in crude and product prices, but its performance improved from the previous quarter as oil production rose.

The kingdom has been pumping more crude as Opec+ unwinds voluntary production cuts after several years of cutting back to support the market.

In October, crude oil futures fell for a third consecutive month, dropping more than 2% and hitting a five-month low, on fears of a supply glut and US tariff concerns.

Aramco reported net profit of 101.02bn riyals ($26.94bn) in the three-month period ended on September 30, down from 103.4bn riyals last year.

 However, net profit was up around 19% compared to the second quarter as revenues rose due to higher volumes and prices for both crude oil and refined and chemical products.

"Our rule of thumb is that every 1mn barrels per day of additional crude oil production translates into an additional $11bn of annual operating cash flow based on 2025 average prices year-to-date," Aramco CFO Ziad al-Murshed told analysts.

The company's total hydrocarbon production was 13.27mn barrels of oil equivalent per day (boepd) in the third quarter, compared to 12.8mn boepd the previous quarter. On Sunday, the Organisation of the Petroleum Exporting Countries and their allies, known as Opec+, agreed to a small oil output increase for December and a pause in increases in the first quarter of next year, in what some investors saw as a signal of oversupply in the market.

Adjusted net profit, which does not include non-recurring items, at Aramco came in at $28bn during the third quarter, beating a company-provided median analyst estimate of $26.5bn.

Aramco's shares rose by up to 1.1% after the earnings were published and closed up 0.7% at 25.76 riyals apiece.

Aramco on Tuesday raised its 2030 sales gas production capacity growth target to about 80% above 2021 levels, up from its earlier goal of more than 60%. 

This increase is expected to bring total gas and associated liquids production to around 6mn boepd, Aramco said citing the expected contribution of its Jafurah field, which is central to Saudi Arabia's ambitions to become a major global player in natural gas.

"As we develop our plans, we see (gas) demand growth increasing more than previously forecasted, including higher demand from additional uses such as AI data centres," CEO Amin Nasser said in the call with analysts.

JPMorgan analysts said in a note that the upgraded guidance translated into a material increase of over 500,000 boepd.

Aramco confirmed $21.3bn in total dividends for the third quarter, about $200mn of which is performance-linked.

The dividends, which will be about one-third lower this year, are a critical source of income for the Saudi Arabian government, which owns 81.5% of Aramco shares directly and another 16% through its sovereign wealth fund PIF.

The kingdom has invested billions to diversify its economy away from oil, which still generated 62% of government revenue last year.

Free cash flow for the third quarter jumped 55% to $23.6bn from the previous three months, Aramco said, citing higher net cash from operating activities coupled with steady capital expenditures.

The cash flow figure is only $2.3bn higher than the company's total dividend payout for the quarter. Total borrowing rose to $95.1bn as of September 30 from $80.9bn a year earlier, with Aramco raising $5bn from a bond in May and a further $3bn from a sale of Islamic bonds in September.

Gearing was 6.3%, from 1.9% at the end of September 2024.

Pfizer

Pfizer reported a drop in third-quarter profits Tuesday as lower sales of Covid-19 products more than offset gains in other medications.

Profits were $3.5bn, down 21% from the year-ago period. Revenues dipped 6% to $16.7bn.

The big US drugmaker, which has been navigating a significant drop in coronavirus-related revenues, pointed to lower Covid-19 infections across the US and internationally, compared with the year-ago period.

Pfizer also experienced a 20% fall in its vaccine revenues after US officials in the Trump administration narrowed guidance for getting the jabs in the US.

Under Health and Human Services Secretary Robert Kennedy, Trump's administration has recommended that for people aged five through 64, only those with higher-risk conditions get a Covid vaccine.

Lower sales in Covid-related products were partially compensated for by gains in other products. These include Eliquis, which is used to treat blood clots, and migraine drug Nurtec.

Pfizer confirmed its full-year revenue forecast and raised somewhat its profit outlook.

But Pfizer profits were also dented by a $1.35bn charge related to an agreement with 3SBio for exclusive rights to commercialise a cancer medication undergoing trials in China.

Pfizer is embroiled in a takeover battle with Novo Nordisk for the purchase of obesity treatment maker Metsera. The Danish pharmaceutical giant last week announced an unsolicited bid for Metsera that topped Pfizer's $4.9bn merger agreement.

Telefonica

Shares in Spanish telecoms giant Telefonica fell sharply on Tuesday after it posted a net loss for the first nine months of the year and announced it would cut its dividend by half in 2026.

The company booked a net loss of €1.08bn ($1.2bn) between January and September, compared with a profit of €954mn during the same period last year, weighed down by losses linked to asset sales in Latin America.

Net profit in the third quarter fell to a lower-than-expected €217mn from €493mn in the same period last year due to one-off impairment charges on its Telefonica Tech unit, the company said in a statement.

Telefonica said it would cut its dividend by half next year to 15 cents per share as part of a new five-year strategic plan as it seeks to reduce its debt.

The company said it expects to achieve up to €2.3bn in savings in 2028, and €3.0bn by 2030, through "streamlined processes, digital transformation, and the sale of legacy network assets".

"Telefonica's results continue to point to a weak business environment in a highly competitive sector, with limited short-term catalysts for a turnaround," Javier Cabrera, analyst at trading platform XTB, wrote in a note. "Telefonica's underperformance is not solely a reflection of the company itself, but also of the broader European telecom landscape." The dividend cut was hurting the company's share price but is a "necessary step" as it will "alleviate a significant financial burden" and free up funds than can be used to grow the business, Cabrera said.

Philips

Dutch electronics and medical device manufacturer Philips reported a slight gain in third-quarter net profits on Tuesday as it battles tariff uncertainty and ongoing litigation over faulty sleep apnoea machines.

The firm banked €187mn in net profits in the third quarter, compared with €181mn it registered in the same period in 2024.

In the second quarter of this year, Philips had posted profits of €240mn.

"In this quarter we maintained our momentum," chief executive Roy Jakobs said in a statement.

Traders welcomed the results, pushing the stock sharply higher at the opening bell.

In the third quarter, sales came in at €4.3bn, the same as during the second quarter.

Orders were up 8%, driven by what the firm said was "sustained double-digit growth" in the US.

Philips continues to battle legal difficulties over a 2021 recall of DreamStation machines for sleep apnoea, a disorder in which breathing intermittently stops during sleep.

It recalled millions of machines over concerns users were at risk of inhaling or swallowing pieces of toxic sound-absorbing foam and fears it could potentially cause cancer.

The firm agreed in 2024 to pay $1.1bn to settle US lawsuits related to the recall, although it did not acknowledge liability.

In September, sources close to the case told AFP that a magistrate in France was looking into whether Philips committed aggravated fraud in relation to the machines.

The Paris prosecutor's office confirmed to AFP that it had received 104 complaints from individuals, two from associations, as well as an alert from France's medical device regulator.

Philips said that probe, opened in June, concerned its actions during the 2021 recall and had no bearing on the quality of its current machines.

In July, Philips said it expected a hit of between €150mn and €200mn this year from US tariffs.
Ryanair
Irish no-frills airline Ryanair on Monday announced a rise in net profit for its second quarter on increased ticket prices.

Profit after tax jumped to €1.7bn ($2bn) compared with €1.4bn one year earlier, the Dublin-based carrier said in a statement.

The group expects full-year traffic to increase more than 3% to 207mn passengers due to earlier-than-expected Boeing plane deliveries and strong first-half demand.

Delays to Boeing aircraft delivery had caused Ryanair to cut its passenger growth target in the past year.

Revenue jumped 8% to around €5.5bn.

Fares increased 13% in the first half of its fiscal year, thanks in part to a favourable timing of Easter holidays in its first quarter.

Ryanair chief executive Michael O'Leary said the company expects to "recover all of last year's seven-percent full-year fare decline".

He added that Ryanair forecasts "reasonable net profit growth" in its 2026 fiscal year.

The company said it has switched more capacity this winter to regions "cutting aviation taxes and incentivising traffic growth", such as Sweden, Slovakia, Italy, Albania and Morocco.

BP

British energy giant BP on Tuesday reported a sharp rise in net profit for the third quarter as higher oil output and cost-cutting helped offset a drop in crude prices.

Profit after tax jumped to $1.16bn for the July-September period, compared with $206mn in the third quarter of 2024, BP said in an earnings statement.

Stripping out exceptional items, underlying net profit dipped but beat analysts' forecasts.

"We continue to make good progress to cut costs, strengthen our balance sheet and increase cash flow and returns," said chief executive Murray Auchincloss.

"There is much more to do but we are moving at pace, and demonstrating that BP can and will do better for our investors," he added.

In February, BP launched a major pivot back to its more profitable oil and gas business, shelving its once industry-leading targets on reducing carbon emissions and slashing clean energy investment.

However, energy prices have come under pressure this year on concerns that US President Donald Trump's tariffs will hurt economic growth, while OPEC+ nations have produced more oil.

British rival Shell last week reported a jump in third-quarter net profit as trading margins and sales volumes improved.

France's TotalEnergies also posted soaring net profit, while US oil giants ExxonMobil and Chevron both reported lower earnings.

As for BP, its latest quarter benefited from higher oil and gas production and improved refining margins.

The company said it expects divestments for the full year to be higher than forecast, as it looks to simplify its business and boost performance.

That comes after BP on Monday announced that it had agreed to sell stakes in certain US shale assets for $1.5bn.

"The back-to-basics mantra is sticking," said Derren Nathan, head of equity research at Hargreaves Lansdown.

He warned, however, that "patience will be needed for those hoping for a return to bumper payouts to shareholders".