A Shell logo is displayed outside a petrol station in Radstock, Somerset, England on February 17, 2024.
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British oil giant shell First-quarter profit reported on Thursday was stronger than expected, helped by higher refining margins and strong oil trading.
Shell reported adjusted profit of $7.7 billion in the first three months of the year, beating analysts’ expectations of $6.5 billion, according to consensus compiled by London Stock Exchange Group (LSEG).
A year ago, the company reported adjusted earnings of $9.6 billion in the same period, and adjusted earnings of $7.3 billion in the final three months of 2023.
Shell Chief Executive Wael Sawan described the results as “another quarter of strong operating and financial performance.”
The oil giant announced a $3.5 billion stock buyback program that is expected to be completed within the next three months. Its dividend remains unchanged.
The London-listed shares were down about 0.1% on Thursday afternoon.
Stuart Lamont, investment manager at British wealth manager RBC Brewin Dolphin, said in a statement: “Despite the impact of lower natural gas prices in the first quarter, Shell’s results exceeded reasonable expectations.”
“Earnings are up, costs are down, the oil and gas giant’s debt is down – all in all, it’s a solid set of data that highlights why the market remains bullish on Shell overall,” Lamont said.
“Investors are looking for reassurances on trading volumes and capital discipline as these will ultimately lead to cash returns. Today’s update provides progress on both fronts and adds an extension to the share buyback program,” he added.
Shell’s chemicals and products unit, which includes refining profits and oil trading, reported first-quarter adjusted earnings of $2.8 billion, a sharp increase from the previous quarter.
Shell reported first-quarter net debt of $40.5 billion, down from $43.5 billion at the end of 2023.
Wider industry trends
Shell’s first-quarter profit fell about 20% annually, reflecting broader energy industry trends.
U.S. oil giants ExxonMobil and ChevronFrance’s Total Energies and Norway’s Equinor both reported first-quarter profit declines last week.
The world’s largest oil and gas giant posted record profits for the full year of 2022 following Russia’s full-scale invasion of Ukraine. Recently, however, revenue has been hit by plummeting natural gas prices.
Spot natural gas prices in Europe fell more than 45% last year, in part due to mild winter weather and abundant supplies.
Shell’s British rival BP is due to report first-quarter earnings on May 7.
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