Better-than-expected results from Royal Dutch Shell and BP fueled optimism that the oil industry is adapting to the oil price downturn.

Both companies said they had made progress with efforts to stabilize profits by making further cuts in spending. “Shell delivered better results this quarter, reflecting strong operational and cost performance,” CEO Ben van Beurden said in a news release.

For the third quarter, Shell posted the equivalent of $1.4 billion in net income after reporting a net loss of $6.1 billion a year earlier. BP, meanwhile, reported net earnings of $1.7 billion, up 35% from $1.2 billion a year earlier.

Other top oil companies, including Exxon Mobil and Chevron, reported sharp drops in quarterly results last week but also beat analysts’ estimates. Shell’s earnings exceeded those of arch-rival Exxon, the world’s largest listed oil company by output and market capitalization.

“Shell and BP’s results were important landmarks for both companies after a tumultuous few years,” The Wall Street Journal said, adding that for Shell, they demonstrated for the first time the value of its acquisition of BG Group earlier this year.

The Motley Fool noted that at the end of the third quarter, Shell’s net-debt-to-capital ratio stood at 29.2%, “a major uptick from 12.7% this time last year that is a reflection of the BG Group acquisition.”

During the third quarter, prices averaged less than $46 a barrel, continuing a downturn now in its third year. In addition to reducing costs, oil companies have responded to the slump by scrapping new projects, renegotiating supply contracts and increasing borrowing.

Shell’s underlying operational costs in 2016 are already at an annualized run rate of $40 billion, $9 billion lower than Shell and BG costs in 2014. But Van Beurden warned that the industry isn’t out of the woods yet.

“Lower oil prices continue to be a significant challenge across the business, and the outlook remains uncertain,” he said.

For 2016, Shell expects organic capital investment to be around $29 billion, some $18 billion below 2014 Shell and BG levels, while 2017 spending is expected to be around $25 billion.

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