NEW YORK (TheStreet) -- Royal Dutch Shell (RDS.A) shares are up 4.05% to $58.07 in early market trading on Thursday after the global oil company announced that it will cut 6,500 jobs as it looks to slash costs amid a prolonged downturn in oil prices.
The Dutch oil company also said that it plans to cut operating costs by $4 billion and capital expenditures by $7 billion.
The company's second quarter net income fell 25% to $3.99 billion as the average price of industry standard Brent crude fell by 43.6% over the past 12 months to $62 per barrel from $110 per barrel.
CEO Ben van Beurde said that while the oil downturn could last for several years, the company could foresee a potential return to prices in the $70 to $90 per barrel range.
"We have to be resilient in a world where oil prices remain low for some time. These are challenging times for the industry, and we are responding with urgency and determination," said van Beurde.
Separately, the company also announced that it agreed to sell a 33% stake in Japanese refiner Showa Shell to Idemitsu Kosan for $1.4 billion.
For the quarter the company earned $1.24 per share, topping analysts' $1.22 per share expectations.
Revenue of $72.4 billion was also ahead of analysts' $68.3 billion estimates.
TheStreet Ratings team rates ROYAL DUTCH SHELL PLC as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:
"We rate ROYAL DUTCH SHELL PLC (RDS.B) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its attractive valuation levels, largely solid financial position with reasonable debt levels by most measures and notable return on equity. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, weak operating cash flow and poor profit margins."