Scott Barbour/Getty Images News
Shell (NYSE:SHEL) +2% in Thursday’s trading after beating Q1 earnings expectations, driven mostly by its integrated gas segment performing better than anticipated despite weaker gas prices during the period.
The company also said it will repurchase another $3.5B of its shares over the next three months, at a similar rate to Q1; its dividend remained unchanged.
Q1 adjusted earnings of $7.73B fell from $9.65B in the year-ago quarter but topped the $6.46B analyst consensus provided by Vara Research, and cash flow from operations totaled $13.33B, beating market forecasts of $13.19B.
Shell’s (SHEL) chemicals and products divisions, which include refining and oil trading, registered a more than 3x increase in adjusted earnings from the previous quarter to $2.8B.
Q1 production of liquefied natural gas totaled 7.6M metric tons, hitting the top end of its guidance for the quarter, while total integrated gas production was 992K boe/day; upstream output was 1.872M boe/day, in line with expectations.
Shell (SHEL) kept a lid on spending in Q1, as $4.49B of cash capex coming in ~$2B less than a year earlier and down from $7.11B in Q4 2023; for FY 2024, the company guided for capex of $22B-$25B.
Shell’s (SHEL) Q1 beat was driven by another strong result from the integrated gas segment and oil products, RBC Capital’s Biraj Borkhataria says.
“Importantly, operational indicators also look strong, with Shell’s liquefied natural gas liquefaction coming in at the top end of prior guidance,” the analyst writes. “With capex guidance and buybacks unchanged, it seems the company continues to try and show investors predictability.”
Also, CEO Wael Sawan said on Shell’s (SHEL) earnings conference call that the company is not actively looking at relisting in New York for now and is focused on stock buybacks.
“We believe strongly that the share price at the moment does not represent the full value of this company,” CFO Sinead Gorman said on the call, adding stock buybacks will continue until “we believe the value of Shell is represented through the share price.”
