Shell Q4: Lower Earnings, Cost Reductions, Dividend Boost And More

Shell plc SHEL shares are trading higher following fourth-quarter results.

Revenue of $66.28 billion missed the consensus of $71.82 billion.

Total production at Integrated Gas fell 4% quarter over quarter (Q/Q) to 905 kboe/d, and Upstream rose 3% Q/Q at 1,859 kboe/d.

This compares to guidance for Integrated Gas production of 880 – 920 kboe/d oil-equivalent barrels per day.

Meanwhile, sales volumes at Marketing declined 5% Q/Q to 2,795 thousand b/d, and Refinery processing intake at Chemical & Products declined 7% Q/Q to 1,215 kb/d.

Adjusted earnings decreased 39% Q/Q to $3.66 billion and Adj. EBITDA fell 11% Q/Q to $14.3 billion.

Net income attributable to Shell plc shareholders declined to $928 million from $4.29 billion in the third quarter of 2024.

This decline was due to increased exploration well write-offs, reduced margins in crude and oil products trading and optimization, lower Marketing margins and volumes, decreased LNG trading and optimization margins, lower realized oil prices, and adverse tax impacts.

Adjusted earnings per ADS for the quarter was $1.20, missing the consensus of $1.49.

Cash flow from operating activities stood at $13.16 billion in the quarter. At the end of the second quarter, net debt was $38.81 billion, with a gearing ratio of 17.7%.

Dividend: Shell increased its fourth-quarter dividend per share by 4% to $0.358 (from $0.344), payable on March 24, 2025, to shareholders of record as of February 14, 2025.

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

The program is expected to be completed prior to the first-quarter 2025 results announcement, scheduled for May 2, 2025.

Shell plc Chief Executive Officer, Wael Sawan stated, “2024 was another year of strong financial performance across Shell. Despite the lower earnings this quarter, cash delivery remained solid and we generated free cash flow of $40 billion across the year, higher than 2023, in a lower price environment.”

”Our continued focus on simplification helped to deliver over $3 billion in structural cost reductions since 2022, meeting our target ahead of schedule, whilst also making significant progress against all our other financial targets.”

Guidance: The company expects 2025 cash capital expenditure to be lower than $21 billion in 2024.

For the first quarter, it expects production at Integrated Gas of approximately 930 – 990 thousand boe/d and Upstream of about 1,750 – 1,950 thousand boe/d.

Shell anticipates refinery utilization to be around 80% – 88% and chemical manufacturing plant utilization to be between 78% – 86%.

The company projects Marketing sales volumes of approximately 2,500 – 3,000 thousand b/d.

Shell expects corporate adjusted earnings to be a net expense of ~$400 million – $600 million in the first quarter 2025.

Investors can gain exposure to Shell via First Trust Exchange-Traded Fund IV FT Energy Income Partners Strategy ETF EIPX and VanEck Natural Resources ETF HAP.

Price Action: SHEL shares are up 1.08% at $65.48 premarket at the last check Thursday.

Read Next: