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Shell Q2 Earnings Preview: Can Refining Margins Save the Day?
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Key Takeaways
Shell expects Q2 Integrated Gas output of 900,000-940,000 boe/d, down from the prior quarter.
Refining margins rose to $8.90 per barrel in Q2, supported by improved refinery utilization.
Chemicals likely face a loss from unplanned Monaca shutdowns, weighing on quarterly results.
Shell plc (SHEL - Free Report) is set to release second-quarter results on July 31. The current Zacks Consensus Estimate for the to-be-reported quarter is earnings of $1.13 per share on revenues of $73.7 billion.
Let’s delve into the factors that might have influenced the integrated energy behemoth’s results in the June quarter. But it’s worth taking a look at SHEL’s previous-quarter performance first.
Highlights of Q1 Earnings & Surprise History
In the last reported quarter, Europe’s largest oil company beat the consensus mark on the back of higher natural gas realizations. SHEL had reported earnings per ADS (on a current cost of supplies basis, excluding items — the market’s preferred measure) — of $1.84, well above the Zacks Consensus Estimate of $1.54. However, revenues of $70.2 billion came in more than 12% below the Zacks Consensus Estimate due to lower LNG sales.
Shell beat the Zacks Consensus Estimate for earnings in three of the last four quarters and missed in the other, resulting in an earnings surprise of 1.7%, on average. This is depicted in the graph below:
The Zacks Consensus Estimate for the second-quarter bottom line has remained unchanged in the past seven days. The estimated figure indicates a 42.6% drop year over year. The Zacks Consensus Estimate for revenues, meanwhile, suggests a 1.8% decrease from the year-ago period.
Factors to Consider
Shell recently issued an updated outlook for the second quarter of 2025, signaling challenges with several parts of its business dealing with headwinds. The company expects second-quarter average production for its Integrated Gas division to be 900,000-940,000 barrels of oil equivalent per day compared with 927,000 achieved in the January-March period. LNG output is now expected to be between 6.4 million and 6.8 million tons, and gas trading results are likely to be weaker than in the first quarter. On the traditional drilling side, production is expected to decline to 1.66-1.76 million barrels of oil equivalent per day, due to both scheduled maintenance and the sale of its Nigerian SPDC assets.
Still, Shell's refining margins look strong, rising from $6.20 per barrel in the first quarter to $8.90 per barrel in the second. This is supported by better utilization of its refineries. However, the company’s chemicals business is expected to report a loss due to unplanned shutdowns at its Monaca plant. Shell’s renewables and energy solutions segment’s bottom line will likely be between $400 million loss and $200 million profit. The Zacks Consensus Estimate for Shell's EPS is pegged at $1.44, down 27% from last year, as the company relies on its marketing and refining arms to offset broader weaknesses.
What Does Our Model Say?
The proven Zacks model does not conclusively show that Shell is likely to beat estimates in the second quarter of 2025. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of beating estimates. But that’s not the case here.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: Shell has an Earnings ESP of 0.00%. This is because the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at $1.13 per share each.
Zacks Rank: Shell currently carries a Zacks Rank #3, which increases the predictive power of ESP. However, the company’s 0.00% ESP makes surprise prediction difficult this earnings season.
Stocks to Consider
While an earnings beat looks uncertain for Shell, here are some firms from the energy space that you may want to consider on the basis of our model:
TC Energy (TRP - Free Report) has an Earnings ESP of +0.96% and a Zacks Rank #3. The firm is scheduled to release earnings on July 31.
TC Energy beat the Zacks Consensus Estimate for earnings in three of the last four quarters and missed in the other, with the average being 4.8%. Valued at around $49 billion, TC Energy has gained 12.8% in a year.
Northern Oil and Gas (NOG - Free Report) has an Earnings ESP of +7.98% and a Zacks Rank #3. The firm is scheduled to release earnings on July 31.
Northern Oil and Gas beat the Zacks Consensus Estimate for earnings in three of the last four quarters and missed in the other, with the average being 14.8%. Valued at around $2.8 billion, Northern Oil ad Gas has lost 29.2% in a year.
Chevron Corporation (CVX - Free Report) (CVX - Free Report) has an Earnings ESP of +3,63% and a Zacks Rank #3. The firm is scheduled to release earnings on Aug. 1.
Over the past 30 days, the Zacks Consensus Estimate for Chevron’s 2025 earnings has moved up 5.7%. Valued at over $270 billion, Chevron is down 1.1% in a year.
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Shell Q2 Earnings Preview: Can Refining Margins Save the Day?
Key Takeaways
Shell plc (SHEL - Free Report) is set to release second-quarter results on July 31. The current Zacks Consensus Estimate for the to-be-reported quarter is earnings of $1.13 per share on revenues of $73.7 billion.
Let’s delve into the factors that might have influenced the integrated energy behemoth’s results in the June quarter. But it’s worth taking a look at SHEL’s previous-quarter performance first.
Highlights of Q1 Earnings & Surprise History
In the last reported quarter, Europe’s largest oil company beat the consensus mark on the back of higher natural gas realizations. SHEL had reported earnings per ADS (on a current cost of supplies basis, excluding items — the market’s preferred measure) — of $1.84, well above the Zacks Consensus Estimate of $1.54. However, revenues of $70.2 billion came in more than 12% below the Zacks Consensus Estimate due to lower LNG sales.
Shell beat the Zacks Consensus Estimate for earnings in three of the last four quarters and missed in the other, resulting in an earnings surprise of 1.7%, on average. This is depicted in the graph below:
Shell PLC Unsponsored ADR Price and EPS Surprise
Shell PLC Unsponsored ADR price-eps-surprise | Shell PLC Unsponsored ADR Quote
Trend in Estimate Revision
The Zacks Consensus Estimate for the second-quarter bottom line has remained unchanged in the past seven days. The estimated figure indicates a 42.6% drop year over year. The Zacks Consensus Estimate for revenues, meanwhile, suggests a 1.8% decrease from the year-ago period.
Factors to Consider
Shell recently issued an updated outlook for the second quarter of 2025, signaling challenges with several parts of its business dealing with headwinds. The company expects second-quarter average production for its Integrated Gas division to be 900,000-940,000 barrels of oil equivalent per day compared with 927,000 achieved in the January-March period. LNG output is now expected to be between 6.4 million and 6.8 million tons, and gas trading results are likely to be weaker than in the first quarter. On the traditional drilling side, production is expected to decline to 1.66-1.76 million barrels of oil equivalent per day, due to both scheduled maintenance and the sale of its Nigerian SPDC assets.
Still, Shell's refining margins look strong, rising from $6.20 per barrel in the first quarter to $8.90 per barrel in the second. This is supported by better utilization of its refineries. However, the company’s chemicals business is expected to report a loss due to unplanned shutdowns at its Monaca plant. Shell’s renewables and energy solutions segment’s bottom line will likely be between $400 million loss and $200 million profit. The Zacks Consensus Estimate for Shell's EPS is pegged at $1.44, down 27% from last year, as the company relies on its marketing and refining arms to offset broader weaknesses.
What Does Our Model Say?
The proven Zacks model does not conclusively show that Shell is likely to beat estimates in the second quarter of 2025. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of beating estimates. But that’s not the case here.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: Shell has an Earnings ESP of 0.00%. This is because the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at $1.13 per share each.
Zacks Rank: Shell currently carries a Zacks Rank #3, which increases the predictive power of ESP. However, the company’s 0.00% ESP makes surprise prediction difficult this earnings season.
Stocks to Consider
While an earnings beat looks uncertain for Shell, here are some firms from the energy space that you may want to consider on the basis of our model:
TC Energy (TRP - Free Report) has an Earnings ESP of +0.96% and a Zacks Rank #3. The firm is scheduled to release earnings on July 31.
You can see the complete list of today’s Zacks #1 Rank stocks here.
TC Energy beat the Zacks Consensus Estimate for earnings in three of the last four quarters and missed in the other, with the average being 4.8%. Valued at around $49 billion, TC Energy has gained 12.8% in a year.
Northern Oil and Gas (NOG - Free Report) has an Earnings ESP of +7.98% and a Zacks Rank #3. The firm is scheduled to release earnings on July 31.
Northern Oil and Gas beat the Zacks Consensus Estimate for earnings in three of the last four quarters and missed in the other, with the average being 14.8%. Valued at around $2.8 billion, Northern Oil ad Gas has lost 29.2% in a year.
Chevron Corporation (CVX - Free Report) (CVX - Free Report) has an Earnings ESP of +3,63% and a Zacks Rank #3. The firm is scheduled to release earnings on Aug. 1.
Over the past 30 days, the Zacks Consensus Estimate for Chevron’s 2025 earnings has moved up 5.7%. Valued at over $270 billion, Chevron is down 1.1% in a year.