Why Oil Giant Shell Shares Are Higher Premarket Today

Shell PLC SHEL shares are trading higher after it reported fourth-quarter FY23 results.

Revenue of $78.73 billion, missed the consensus of $84.71 billion. Total production at Integrated Gas remained flat Q/Q at 901 kboe/d, and Upstream rose to 1,870 kboe/d from 1,753 kboe/d in the prior quarter.

Meanwhile, sales volumes at Marketing fell to 2,508 thousand b/d from 2,654 thousand b/d previous quarter, and at Chemical & Products declined 14% on quarter.

Net income attributable to Shell plc shareholders declined to $474 million from $10.41 billion a year ago. Adjusted earnings per ADS for the quarter was $2.22, above the consensus of $0.97.

Adjusted earnings increased 17% Q/Q to $7.3 billion and Adj. EBITDA remained flat Q/Q to $16.34 billion, reflecting strong operational performance, LNG trading, and optimization results.

Cash flow from operating activities stood at $54.2 billion in the year. At the end of the year, net debt was $43.5 billion, with a gearing ratio of 18.8%. 

In the fourth quarter, total shareholder distributions stood at $6.2 billion, comprising share repurchases of $4.0 billion and cash dividends of $2.2 billion.

Buyback: The company disclosed a new $3.5 billion share buyback program, which is expected to be completed by the first quarter of 2024 results.

Dividend Boost: Shell raised fourth-quarter FY23 dividend per share by 4% to $0.344.

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

It expects first-quarter production at Integrated Gas of approximately 930 – 990 thousand boe/d and Upstream of about 1,730 – 1,930 thousand boe/d.

Related: Oil Giant Shell Tweaks Q4 Outlook, Shocks Shares With Around $4.5B Impairment Charge

The company projects Marketing sales volumes at approximately 2,150 – 2,650 thousand b/d. 

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Price Action: SHEL shares are up 2.46% Y/Y at $64.46 premarket on the last check Thursday.

Photo via Wikimedia Commons