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Globe and Mail
06-08-2025
- Business
- Globe and Mail
Shell Q2 Earnings Beat Even as Production & Oil Prices Fall
Europe's largest oil company, Shell plc SHEL, reported second-quarter 2025 earnings per ADS (on a current cost of supplies basis, excluding items — the market's preferred measure) of $1.42, which came in well above the Zacks Consensus Estimate of $1.13 on the back of cost reductions and higher natural gas realizations. However, the bottom line fell from the year-ago adjusted profit of $1.97 due to lower upstream production plus a decline in oil prices. Shell's revenues of $66.4 billion were down from $75.1 billion in second-quarter 2024 and missed the consensus mark by 9.9%. Meanwhile, Shell repurchased $3.5 billion in shares in the second quarter. The London-based company expects another $3.5 billion worth of repurchases for the third quarter. Inside Shell's Segments Upstream: The segment recorded a profit of $1.7 billion (excluding items) during the quarter, down from $2.3 billion (adjusted) in the year-ago period. This primarily reflects the impact of lower production and oil prices. At $63.62 per barrel, the group's worldwide realized liquids prices were some 19% below the year-earlier levels, but natural gas prices rose roughly 11%. Shell's upstream volumes averaged 1,732 thousand oil-equivalent barrels per day (MBOE/d), down 2.9% from the year-ago period, mainly due to a dip in natural gas churned out by the company. Liquids production totaled 1,334 thousand barrels per day (an increase of 2.9% year over year), and natural gas output came in at 2,310 million standard cubic feet per day (down 18%). Chemicals and Products: In this segment, the London-based supermajor reported an adjusted profit of $118 million, plunging more than 89% from $1.1 billion earned in the year-ago period. The unfavorable comparison was due to lower margins. Meanwhile, refinery utilization came in at 94%. Integrated Gas: The unit reported an adjusted income of $1.7 billion, deteriorating from $2.7 billion in the April-June quarter of 2024. Results were primarily impacted by lower production available for sale, which fell 6.8% from the second quarter of 2024 to 913 MBOE/d. However, LNG sales volumes were up 8.3% year over year to 17.77 million tons. Marketing: The segment recorded an income of $1.2 billion (excluding items) during the quarter compared to the year-ago earnings of $1.1 billion, due to higher margins and favorable tax movements. Renewables and Energy Solutions: The segment incurred an adjusted loss of $9 million, reflecting an improvement from the year-ago loss of $187 million. The performance boost primarily reflects lower operating expense and favorable tax movements. External power sales were down 5.4% year over year to 70 terawatt hours, while piped gas sales fell 10.8% to 132 terawatt hours. Financial Performance As of June 30, 2025, the Zacks Rank #3 (Hold) company had $32.7 billion in cash and $75.7 billion in debt (including short-term debt). Net debt-to-capitalization was approximately 19.1%, up from 17% a year ago. You can see the complete list of today's Zacks #1 Rank stocks here. During the quarter under review, Shell generated cash flow from operations of $11.9 billion, returned $2.1 billion to its shareholders through dividends, and spent $5.4 billion on capital projects. The company's cash flow from operations decreased 11.6% from the year-earlier level. Meanwhile, the group raked in $6.5 billion in free cash flow during the second quarter compared to $10.2 billion a year ago. Guidance Shell expects third-quarter 2025 upstream volumes of 1,700-1,900 MBOE/d, while Integrated Gas production is expected between 910 MBOE/d and 970 MBOE/d. The company also foresees marketing sales volumes of 2,600-3,100 thousand barrels per day and refinery utilization in the range of 88-96%. Important Energy Earnings So Far While we have discussed Shell's second-quarter results in detail, let's take a look at some other Big Oil energy reports of this season. American multinational ExxonMobil XOM reported second-quarter 2025 earnings per share of $1.64 (excluding identified items), which beat the Zacks Consensus Estimate of $1.49. The bottom line, however, declined from the year-ago level of $2.14. ExxonMobil's total quarterly revenues of $81.5 billion missed the Zacks Consensus Estimate of $82.8 billion. The top line decreased from the year-ago figure of $93.1 billion. ExxonMobil's better-than-expected quarterly earnings were fueled by higher liquid production from the United States and stronger industry refining margins resulting from higher seasonal demand and increased volumes. The positives were partially offset by lower crude oil and natural gas prices. Smaller rival Chevron CVX reported adjusted EPS of $1.77, beating the Zacks Consensus Estimate of $1.70. The outperformance stemmed from higher-than-expected production in the company's key upstream segment. The company's output of 3,396 MBOE/d — a record — came in above the consensus mark of 3,326 MBOE/d. Healthy gain in natural gas realizations and stronger refined product sales margins also played their part. Chevron recorded $8.6 billion in cash flow from operations compared to $6.3 billion in the year-ago period due to the absence of prior-year working capital outflows and higher cash distributions from Kazakhstan. Chevron's free cash flow for the quarter was $4.9 billion. London-based BP plc BP reported second-quarter 2025 adjusted EPS of 90 cents. The figure beat the Zacks Consensus Estimate of 68 cents but declined from the year-ago reported figure of $1.00. BP's better-than-expected quarterly earnings can be primarily attributed to higher oil production, which was partially offset by lower price realizations. BP expects third-quarter 2025 upstream production to dip slightly from the prior-quarter level. It also anticipates a seasonal rise in customers' business volumes and a significant decline in its refinery turnaround activity. Taxes are projected to increase by about $1 billion due to payment timing. Zacks' Research Chief Picks Stock Most Likely to "At Least Double" Our experts have revealed their Top 5 recommendations with money-doubling potential – and Director of Research Sheraz Mian believes one is superior to the others. Of course, all our picks aren't winners but this one could far surpass earlier recommendations like Hims & Hers Health, which shot up +209%. See Our Top Stock to Double (Plus 4 Runners Up) >> Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. BP p.l.c. (BP): Free Stock Analysis Report Chevron Corporation (CVX): Free Stock Analysis Report Exxon Mobil Corporation (XOM): Free Stock Analysis Report Shell PLC Unsponsored ADR (SHEL): Free Stock Analysis Report
Yahoo
01-08-2025
- Business
- Yahoo
Shell PLC (SHEL) Q2 2025 Earnings Call Highlights: Strong Marketing Performance and Strategic ...
Adjusted Earnings: $4.3 billion for Q2 2025. Cash Flow from Operations: $11.9 billion in Q2 2025. Structural Cost Reductions: $800 million in the first half of 2025; total of $3.9 billion since 2022. Share Buyback Program: Announced $3.5 billion, marking the 15th consecutive quarter of $3 billion or more in buybacks. Marketing Performance: Best Q2 results in nearly a decade, with strong performance in Mobility and Lubricants. CapEx Outlook: Cash CapEx outlook for full year 2025 remains unchanged. Shareholder Distributions: 46% of CFFO over the last four quarters, within the target range of 40% to 50%. Warning! GuruFocus has detected 6 Warning Signs with DTM. Release Date: July 31, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Positive Points Shell PLC (NYSE:SHEL) achieved $800 million in structural cost reductions in the first half of 2025, contributing to a total of $3.9 billion since 2022, on track for a target of $5 billion to $7 billion by 2028. The startup of LNG Canada, where Shell holds a 40% interest, marks a significant milestone, offering strategic advantages with shorter transit routes to Asia. Shell's marketing segment recorded its best Q2 results in nearly a decade, driven by strong performance in Mobility and Lubricants. A new $3.5 billion share buyback program was announced, marking the 15th consecutive quarter of $3 billion or more in buybacks. Shell's Upstream business continues to outperform, with strong operational improvements and a focus on high-graded portfolios, particularly in the Gulf of Mexico and Brazil. Negative Points The macroeconomic environment remains challenging, with geopolitical uncertainties affecting commodity prices and margins. Chemicals and Products faced a difficult quarter due to weak margins and unplanned downtime, with continued negative free cash flow in the chemicals segment. Despite divestments, Shell's chemical business still struggles with excess capacity and market challenges, particularly in China. The Integrated Gas segment experienced fewer trading and optimization opportunities, with a disconnect between market volatility and supply-demand fundamentals. Shell's gearing level increased slightly, raising concerns about the sustainability of its buyback program if oil prices fall significantly. Q & A Highlights Q: Can you discuss the outlook for trading optimization businesses in the context of the challenging environment in Q2, and provide a breakdown between liquids, products, and gas? A: Wael Sawan, CEO, highlighted the strong performance of the Upstream business, emphasizing the focus on increasing cash flow per barrel and operational improvements. Sinead Gorman, CFO, explained that trading had a decent contribution in Q2, with each segment contributing differently. The renewables segment performed as expected, while LNG saw less volatility post-Russia-Ukraine conflict. Products had good results, but crude trading faced a disconnect between market volatility and fundamentals, leading to a more prudent approach. Q: How high are you willing to take the gearing level, and is there a need to slow down the $3 billion quarterly buyback program? A: Sinead Gorman, CFO, stated that the decision on gearing involves a trade-off between value and risk. With a current gearing of 19.1%, there is room for flexibility. The focus remains on maintaining a 40% to 50% distribution of cash flow from operations (CFFO) through the cycle. The company is comfortable with its balance sheet and will continue to prioritize shareholder returns. Q: Can you provide insights into the state of global oil demand given the strong marketing results and refining margins? A: Wael Sawan, CEO, noted that year-to-date oil products demand growth was robust at around 1 million barrels per day, despite headwinds. The company focuses on non-price dependent strategies, including structural cost reductions and disciplined capital allocation, to drive performance and shareholder value. Q: What are the opportunities for further cost savings, and is there still room for improvement in the Upstream segment? A: Wael Sawan, CEO, emphasized that cost reduction opportunities exist across the organization, including Upstream, functions, and supply chain. The company is focused on simplifying operations and leveraging AI to achieve $5 billion to $7 billion in cost reductions by 2028. The capital allocation strategy remains dynamic, with a high bar for acquisitions. Q: How resilient is the current buyback program to potential lower oil prices, and what are the moving parts for LNG over the next one to two years? A: Sinead Gorman, CFO, explained that the buyback program is supported by a strong balance sheet and a dynamic approach to cash flow management. The LNG business is expected to stabilize at a new normal, with changes in portfolio mix and contract expiries. The company remains focused on optimizing its LNG portfolio amid market changes. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
31-07-2025
- Business
- Yahoo
Shell Q2 Earnings Preview: Can Refining Margins Save the Day?
Shell plc SHEL is set to release second-quarter results on July 31. The current Zacks Consensus Estimate for the to-be-reported quarter is earnings of $1.13 per share on revenues of $73.7 delve into the factors that might have influenced the integrated energy behemoth's results in the June quarter. But it's worth taking a look at SHEL's previous-quarter performance first. Highlights of Q1 Earnings & Surprise History In the last reported quarter, Europe's largest oil company beat the consensus mark on the back of higher natural gas realizations. SHEL had reported earnings per ADS (on a current cost of supplies basis, excluding items — the market's preferred measure) — of $1.84, well above the Zacks Consensus Estimate of $1.54. However, revenues of $70.2 billion came in more than 12% below the Zacks Consensus Estimate due to lower LNG beat the Zacks Consensus Estimate for earnings in three of the last four quarters and missed in the other, resulting in an earnings surprise of 1.7%, on average. This is depicted in the graph below: Shell PLC Unsponsored ADR Price and EPS Surprise Shell PLC Unsponsored ADR price-eps-surprise | Shell PLC Unsponsored ADR Quote Trend in Estimate Revision The Zacks Consensus Estimate for the second-quarter bottom line has remained unchanged in the past seven days. The estimated figure indicates a 42.6% drop year over year. The Zacks Consensus Estimate for revenues, meanwhile, suggests a 1.8% decrease from the year-ago period. Factors to Consider Shell recently issued an updated outlook for the second quarter of 2025, signaling challenges with several parts of its business dealing with headwinds. The company expects second-quarter average production for its Integrated Gas division to be 900,000-940,000 barrels of oil equivalent per day compared with 927,000 achieved in the January-March period. LNG output is now expected to be between 6.4 million and 6.8 million tons, and gas trading results are likely to be weaker than in the first quarter. On the traditional drilling side, production is expected to decline to 1.66-1.76 million barrels of oil equivalent per day, due to both scheduled maintenance and the sale of its Nigerian SPDC assets. Still, Shell's refining margins look strong, rising from $6.20 per barrel in the first quarter to $8.90 per barrel in the second. This is supported by better utilization of its refineries. However, the company's chemicals business is expected to report a loss due to unplanned shutdowns at its Monaca plant. Shell's renewables and energy solutions segment's bottom line will likely be between $400 million loss and $200 million profit. The Zacks Consensus Estimate for Shell's EPS is pegged at $1.44, down 27% from last year, as the company relies on its marketing and refining arms to offset broader weaknesses. What Does Our Model Say? The proven Zacks model does not conclusively show that Shell is likely to beat estimates in the second quarter of 2025. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of beating estimates. But that's not the case can uncover the best stocks to buy or sell before they're reported with our Earnings ESP ESP: Shell has an Earnings ESP of 0.00%. This is because the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at $1.13 per share Rank: Shell currently carries a Zacks Rank #3, which increases the predictive power of ESP. However, the company's 0.00% ESP makes surprise prediction difficult this earnings season. Stocks to Consider While an earnings beat looks uncertain for Shell, here are some firms from the energy space that you may want to consider on the basis of our model:TC Energy TRP has an Earnings ESP of +0.96% and a Zacks Rank #3. The firm is scheduled to release earnings on July can see the complete list of today's Zacks #1 Rank stocks Energy beat the Zacks Consensus Estimate for earnings in three of the last four quarters and missed in the other, with the average being 4.8%. Valued at around $49 billion, TC Energy has gained 12.8% in a Oil and Gas NOG has an Earnings ESP of +7.98% and a Zacks Rank #3. The firm is scheduled to release earnings on July Oil and Gas beat the Zacks Consensus Estimate for earnings in three of the last four quarters and missed in the other, with the average being 14.8%. Valued at around $2.8 billion, Northern Oil ad Gas has lost 29.2% in a Corporation (CVXCVX) has an Earnings ESP of +3,63% and a Zacks Rank #3. The firm is scheduled to release earnings on Aug. the past 30 days, the Zacks Consensus Estimate for Chevron's 2025 earnings has moved up 5.7%. Valued at over $270 billion, Chevron is down 1.1% in a year. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Chevron Corporation (CVX) : Free Stock Analysis Report TC Energy Corporation (TRP) : Free Stock Analysis Report Northern Oil and Gas, Inc. (NOG) : Free Stock Analysis Report Shell PLC Unsponsored ADR (SHEL) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Sign in to access your portfolio
Yahoo
23-07-2025
- Business
- Yahoo
Shell (SHEL) Rises Higher Than Market: Key Facts
Shell (SHEL) closed at $71.15 in the latest trading session, marking a +1.18% move from the prior day. This change outpaced the S&P 500's 0.06% gain on the day. Meanwhile, the Dow experienced a rise of 0.41%, and the technology-dominated Nasdaq saw a decrease of 0.39%. Heading into today, shares of the oil and gas company had lost 0.73% over the past month, outpacing the Oils-Energy sector's loss of 3.71% and lagging the S&P 500's gain of 5.88%. Investors will be eagerly watching for the performance of Shell in its upcoming earnings disclosure. The company is predicted to post an EPS of $1.13, indicating a 42.64% decline compared to the equivalent quarter last year. At the same time, our most recent consensus estimate is projecting a revenue of $73.7 billion, reflecting a 1.8% fall from the equivalent quarter last year. For the full year, the Zacks Consensus Estimates project earnings of $5.98 per share and a revenue of $290.48 billion, demonstrating changes of -20.48% and +0.5%, respectively, from the preceding year. Additionally, investors should keep an eye on any recent revisions to analyst forecasts for Shell. These latest adjustments often mirror the shifting dynamics of short-term business patterns. As such, positive estimate revisions reflect analyst optimism about the business and profitability. Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system. The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has shifted 2.68% downward. At present, Shell boasts a Zacks Rank of #3 (Hold). Looking at valuation, Shell is presently trading at a Forward P/E ratio of 11.76. This signifies a premium in comparison to the average Forward P/E of 11.1 for its industry. We can also see that SHEL currently has a PEG ratio of 2.04. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. SHEL's industry had an average PEG ratio of 1.98 as of yesterday's close. The Oil and Gas - Integrated - International industry is part of the Oils-Energy sector. This industry, currently bearing a Zacks Industry Rank of 177, finds itself in the bottom 29% echelons of all 250+ industries. The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1. You can find more information on all of these metrics, and much more, on Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Shell PLC Unsponsored ADR (SHEL) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research
Yahoo
15-07-2025
- Business
- Yahoo
Shell (SHEL) Stock Drops Despite Market Gains: Important Facts to Note
In the latest trading session, Shell (SHEL) closed at $71.10, marking a -1.66% move from the previous day. The stock fell short of the S&P 500, which registered a gain of 0.14% for the day. At the same time, the Dow added 0.2%, and the tech-heavy Nasdaq gained 0.27%. Prior to today's trading, shares of the oil and gas company had lost 0.33% lagged the Oils-Energy sector's gain of 2.89% and the S&P 500's gain of 3.97%. Analysts and investors alike will be keeping a close eye on the performance of Shell in its upcoming earnings disclosure. The company is expected to report EPS of $1.44, down 26.9% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $74.34 billion, down 0.95% from the prior-year quarter. For the full year, the Zacks Consensus Estimates project earnings of $6.32 per share and a revenue of $291.12 billion, demonstrating changes of -15.96% and +0.72%, respectively, from the preceding year. Investors should also take note of any recent adjustments to analyst estimates for Shell. These latest adjustments often mirror the shifting dynamics of short-term business patterns. Hence, positive alterations in estimates signify analyst optimism regarding the business and profitability. Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. To capitalize on this, we've crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical rating system. The Zacks Rank system, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. Over the past month, there's been a 2.76% rise in the Zacks Consensus EPS estimate. Shell is holding a Zacks Rank of #3 (Hold) right now. With respect to valuation, Shell is currently being traded at a Forward P/E ratio of 11.44. Its industry sports an average Forward P/E of 11.14, so one might conclude that Shell is trading at a premium comparatively. We can additionally observe that SHEL currently boasts a PEG ratio of 1.98. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. As the market closed yesterday, the Oil and Gas - Integrated - International industry was having an average PEG ratio of 1.98. The Oil and Gas - Integrated - International industry is part of the Oils-Energy sector. At present, this industry carries a Zacks Industry Rank of 170, placing it within the bottom 32% of over 250 industries. The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1. Don't forget to use to keep track of all these stock-moving metrics, and others, in the upcoming trading sessions. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Shell PLC Unsponsored ADR (SHEL) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
