Shell Renews $3.5 Billion Quarterly Buyback Program as Earnings Rise — 2nd Update

By Adam Whittaker

Shell continued its $3.5 billion quarterly buyback after adjusted earnings rose more than expected, boosted by an improved trading performance and higher margins.

The British energy company said the rise in earnings also reflected record production in Brazil and 20-year highs in the Gulf of Mexico, coupled with the highest adjusted earnings in its marketing division in more than a decade.

In particular, Shell's gas trading division recovered from a weak second-quarter when traders were caught out by market volatility. The ramp-up of its LNG Canada project boosted volumes, with 13 cargos from phase 1 delivered over the period, and Shell said it expects the start up of phase 2 later this quarter.

Shell's adjusted earnings--a closely watched metric that strips out certain commodity-price adjustments and one-time charges--rose to $5.43 billion from $4.26 billion in the preceding quarter, beating the $5.09 billion analysts polled by Vara Research had expected. Cash flow generation was also ahead of expectations.

The move means the company will have bought back at least $3 billion in shares for 16 consecutive quarters, it said. Once the buyback is complete, Shell will have repurchased more than a quarter of its shares over the last four years.

This streak has led Shell to be seen as something of an outlier compared to European peers. Its strong balance sheet and ability to generate sufficient free cash flow in a weaker oil-price environment mean its returns are considered among the safest in the sector. BP and TotalEnergies had already cut their buyback run rate.

The consistent returns come despite oil prices falling on the prospect of a supply glut as the Organization of the Petroleum Exporting Countries and its allies ramp up production. A cloudy macroeconomic outlook and global trade tensions have added to the downward pressure on prices.

Shell is consistently delivering and its shares should rerate into 2026, analysts at Barclays wrote in a note to clients. Its shares are up 16% over the year to date but traded flat in late-morning European trade.

At the end of the quarter, net debt was down to $41.2 billion, from $43.2 billion.

Adjusted earnings in Shell's upstream division increased to $1.8 billion from $1.7 billion, though higher volumes were partially offset by a $271 million cash payment to partners in the Tupi field, Brazil, to better reflect total oil production across the block. Earlier this month, Shell warned of an up to $400 million payment hit.

Its core integrated gas division reported adjusted earnings of $2.1 billion compared with $1.7 billion in the prior.

Write to Adam Whittaker at adam.whittaker@wsj.com

(END) Dow Jones Newswires

October 30, 2025 06:56 ET (10:56 GMT)