Investing.com — Shell shares rose about 3% Thursday after the oil giant reported third-quarter adjusted earnings of $10.81 billion on Thursday, nearly double from a year earlier, and increased its share buyback, helped by stronger refining margins and higher liquefied natural gas prices.
The adjusted earnings, the highest since 2022, beat the $10.33 billion average estimate in a company-provided analyst poll. Adjusted earnings per share were $1.93, versus $0.93 a year ago.
The new buyback, to be completed by the fourth-quarter results announcement, follows $4.2 billion of repurchases announced with second-quarter results, which Shell has now completed.
The oil major also declared a third-quarter dividend of 39.06 cents a share, up from 35.8 cents a year earlier. Total distributions in the quarter were $5.3 billion.
Refining drove the quarterly gains. Adjusted earnings at the chemicals and products division rose to $3.86 billion from $550 million a year earlier, with the products business earning $3.75 billion on higher refining margins.
Integrated gas earnings rose 42% to $3.04 billion, helped by higher realized LNG prices and volumes.
Upstream earnings rose to $3.19 billion from $1.80 billion. Adjusted EBITDA was $22.7 billion, up from $14.8 billion a year ago.
Cash flow from operations (CFFO) was $21 billion, and free cash flow was $16.3 billion, while net debt fell to $39.7 billion from $41.8 billion in the second quarter, and gearing improved to 16.6% from 18.7%.
Return on average capital employed was 14.4%.
“Divisionally, results strong across the board, [with] downstream CFFO $8.5bn a highlight,” Jefferies analysts said.
Production available for sale was 2.57 million barrels of oil equivalent a day, up from 2.46 million in the second quarter but below the 2.82 million of a year earlier. Shell completed its $14.0 billion acquisition of ARC Resources on Sept. 2, adding about 370,000 barrels a day. Nine-month production fell 17% in integrated gas because of the Middle East conflict’s effect on Qatari volumes.
For the fourth quarter, Shell guided for upstream production of 1.7 million to 1.9 million barrels a day and refinery utilization of 92% to 100%.
The company expects cash capital expenditure of $23 billion to $25 billion in 2026.
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