Shell's Mixed Bag: Q2 Revenue Beats Expectations, But Profit and Production Decline Sequentially

Shell plc SHEL shares are trading higher after it reported second-quarter FY24 results.

Revenue of $74.46 billion beat the consensus of $61.33 billion. Total production at Integrated Gas fell 1% Q/Q to 980 kboe/d, and Upstream declined 5% Q/Q at 1,783 kboe/d. 

Meanwhile, sales volumes at Marketing rose to 2,868 thousand b/d from 2,763 thousand b/d the previous quarter, and Refinery processing intake at Chemical & Products remained broadly flat Q/Q at 1,429 kb/d.

Related: Shell Absorbs Charges, Pauses Project: Q2 Outlook Dims With Impairments and Biofuels Halt

Adjusted earnings decreased 19% Q/Q to $6.29 billion and Adj. EBITDA fell 10% Q/Q to $16.81 billion. This decline was due to reduced trading and optimization contributions from seasonality and realized prices (down $531 million), lower volumes (down $209 million), and adverse deferred tax movements.

Net income attributable to Shell plc shareholders declined to $3.52 billion from $7.36 billion a quarter ago. Adjusted earnings per ADS for the quarter was $1.98, above the consensus of $1.82.

Cash flow from operating activities stood at $13.51 billion in the quarter. At the end of the second quarter, net debt was $38.31 billion, with a gearing ratio of 17.0%. 

Dividend Boost: Shell disclosed a first-quarter dividend per share of $0.344, payable on September 23, 2024, to shareholders of record as of August 16, 2024.

Buyback: The company announced a share buyback program worth $3.5 billion for a contract term of around three months.

FY24 Outlook Reiterated: The company expects cash capital expenditure of $22 billion – $25 billion.

Q3 Guidance: It expects production at Integrated Gas of approximately 920 – 980 thousand boe/d and Upstream of about 1,580 – 1,780 thousand boe/d.

Shell anticipates refinery utilization to be around 83% to 91% and chemical manufacturing plant utilization to be between 73% and 81%. The company projects Marketing sales volumes of approximately 2,700 – 3,200 thousand b/d. 

Shell stock has gained 20% in the last 12 months. Investors can gain exposure to the stock via Direxion Hydrogen ETF HJEN and VanEck Natural Resources ETF HAP.

Also Read: Shell Requests Approval for Exploration Wells Off South Africa’s Coast: Report

Price Action: SHEL shares are up 0.76% at $73.78 premarket at the last check Thursday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

Photo via Wikimedia Commons

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