Shell Q3 earnings broadly in line, $3.5bn share buyback announced

Oil giant Shell posted third-quarter adjusted earnings of $6.2bn on Thursday, as it announced a $3.5bn share buyback over the next three months.

Earnings were up from $5.1bn in the previous three months, but down from $9.5bn in the same period a year earlier, and only slightly behind expectations of $6.48bn.

Shell said the results reflected a "robust" operational performance, and higher oil prices and refining margins.

It also noted that the $3.5bn share buyback brings the buybacks for the second half to $6.5bn, which is well in excess of the $5bn announced at the capital markets day in June, and takes the total announced for 2023 to around $23bn.

Chief executive Wael Sawan said: "Shell delivered another quarter of strong operational and financial performance, capturing opportunities in volatile commodity markets. We continue to simplify our portfolio while delivering more value with less emissions."

At 0940 GMT, the shares were up 1.8% at 2,704p.

Russ Mould, investment director at AJ Bell, said: "Given energy giant Shell always trails its quarterly numbers the scope for a welcome or unwelcome surprise is somewhat reduced and, sure enough, the company has served up a solid third quarter update.

"The divergence in fortunes with BP - which disappointed earlier this week - will only add fuel to the fire in terms of speculation around some kind of merger between the two companies.

"Profit is down materially year-on-year but that’s the nature of having your fortunes tied to a volatile commodity and Shell enjoyed a bumper third quarter in 2022 in this respect thanks to the impact of the war in Ukraine on oil and gas prices.

"It’s now the turn of conflict in the Middle East to put upward pressure on oil and gas prices again. Chief executive Wael Sawan is certainly feeling confident enough to dole out generous returns to shareholders with another big share buyback.

"Investors in oil and gas stocks on this side of the Atlantic have felt short-changed relative to holders of the big US oil firms which have ignored the clamour to go green and been rewarded by the market for doing so.

"That informs the shift under Sawan since he took over at Shell at the beginning of the year. Investments will still be made in the energy transition but they will have to stack up in terms of returns."