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Shell (SHEL.L) reported lower-than-expected profit for the fourth quarter but announced another share buyback worth $3.5bn.
The oil major posted adjusted earnings of $3.26bn for the quarter, in results released on Thursday, down from $5.43bn in the previous three months and lower than the $3.66bn reported a year ago. That was also below expectations of $3.51bn, according to consensus estimates provided by the company.
For the year, adjusted earnings totalled $18.53bn, which was down from the $23.72bn reported for 2024 and was below expectations of $18.79bn.
Shell (SHEL.L) shares fell 1% shortly after the market open in London, with the stock trading just 7.8% in the green over one year.
Despite missing estimates, Shell (SHEL.L) increased its dividend by 4% to $0.372 for the fourth quarter and said it was launching another $3.5bn share buyback programme.
Wael Sawan, CEO of Shell said: “2025 was a year of accelerated momentum, with strong operational and financial performance across Shell.”
“We generated free cash flow of $26 billion, made significant progress in focusing our portfolio and reached $5 billion of cost savings since 2022, with more to come.”
The fall in Shell’s (SHEL.L) profits comes as oil prices have continued to see a longer term decline over concerns about oversupply in the market, despite recent rises owing to heightened geopolitical tensions and risks of disruption to supply.
Shell (SHEL.L) had already given investors a idea of what to expect from its performance in the fourth quarter in a trading update published in early January.
In the update, Shell (SHEL.L) said that results from trading for its chemicals and products division were expected to be “significantly lower” than the third quarter.
In Thursday’s results, Shell posted cash flow from operations of $9.44bn for the fourth quarter, which was lower than the $12.2bn reported for the previous three months.
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Net debt stood at $45.7bn at the end of the year, compared to $41.2bn in the third quarter.
Richard Hunter, head of markets at Interactive Investor, said: “The final quarter was one which Shell will want to forget, although the numbers for the year as a whole were slightly more palatable.”
“The volatility of the oil price inevitably had an effect as tepid demand and oversupply put a dampener on any price progress.”
“Some investors are unwilling or unable to invest in oil stocks on ethical grounds, but the company remains a core constituent in many traditional portfolios alongside the old adage of ‘never sell Shell’,” he said.