Shell's Solid Q3 Performance: Strong Revenue, $3.5 Billion Buyback, And Refined Capex Guidance

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

Revenue of $71.09 billion beat the consensus of $61.34 billion. 

Total production at Integrated Gas fell 4% quarter over quarter (Q/Q) to 941 kboe/d, and Upstream rose 2% Q/Q at 1,811 kboe/d. 

Meanwhile, sales volumes at Marketing rose 3% Q/Q to 2,945 thousand b/d, and Refinery processing intake at Chemical & Products declined 9% Q/Q to 1,305 kb/d.

Related: Shell Raises Q3 Upstream Production Outlook, Revises Integrated Gas Guidance

Adjusted earnings decreased 4% Q/Q to $6.03 billion and Adj. EBITDA fell 5% Q/Q to $16.01 billion. This decline was due to lower refining margins, the decline in realized oil prices, and higher operating expenses.

Net income attributable to Shell plc shareholders rose to $4.29 billion from $3.52 billion a quarter ago. 

Adjusted earnings per ADS for the quarter was $1.92, above the consensus of $1.66.

Cash flow from operating activities stood at $14.68 billion in the quarter. At the end of the second quarter, net debt was $35.23 billion, with a gearing ratio of 15.7%. 

Dividend: Shell disclosed a third-quarter dividend per share of $0.344, payable on December 19, 2024, to shareholders of record as of November 15, 2024.

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 fourth-quarter 2024 results announcement, scheduled for January 30, 2025.

Guidance: The company now expects cash capital expenditure of below $22 billion (from $22 billion – $25 billion earlier).

For the fourth quarter, it expects production at Integrated Gas of approximately 900 – 960 thousand boe/d and Upstream of about 1,750 – 1,950 thousand boe/d.

Shell anticipates refinery utilization to be around 75% – 83% and chemical manufacturing plant utilization to be between 72% – 80%.

The company projects Marketing sales volumes of approximately 2,550 – 3,050 thousand b/d. 

Shell expects corporate adjusted earnings to be a net expense of ~$600 million – $800 million.

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 1.11% at $66.31 premarket at the last check Thursday.

Image by siam.pukkato via Shutterstock

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