We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Shell Q4 Earnings Miss as Lower Oil Prices Pressure Results
Read MoreHide Full Article
Key Takeaways
Shell posted Q4 EPS of $1.14, missing estimates as oil prices fell and tax adjustments hurt results.
Shell's upstream profit slipped as liquids and gas prices dropped, despite higher overall production volumes.
Shell returned cash via buybacks and dividends, but operating and free cash flow declined year over year.
Europe’s largest oil company, Shell plc (SHEL - Free Report) , reported fourth-quarter 2025 earnings per ADS (on a current cost of supplies basis, excluding items — the market’s preferred measure) of $1.14, which came in below the Zacks Consensus Estimate of $1.21 due to a decline in oil prices and unfavourable tax adjustments, partly offset by higher hydrocarbon production. The bottom line also fell from the year-ago adjusted profit of $1.20.
Shell’s revenues of $66.7 billion were down slightly from $66.8 billion in fourth-quarter 2024 and missed the consensus mark by 2%.
Meanwhile, Shell repurchased $3.4 billion in shares in the fourth quarter. The London-based company expects another $3.5 billion worth of repurchases for the first quarter.
Shell PLC Unsponsored ADR Price, Consensus and EPS Surprise
Upstream: The segment recorded a profit of $1.6 billion (excluding items) during the quarter, down from $1.7 billion (adjusted) in the year-ago period. This primarily reflects the impact of lower prices and a decline in natural gas output.
At $58.61 per barrel, the group’s worldwide realized liquids prices were 17.1% below the year-earlier levels, while natural gas prices plunged 11.5%.
Shell’s upstream volumes averaged 1,892 thousand oil-equivalent barrels per day (MBOE/d), up 1.8% from the year-ago period, mainly due to a rise in oil churned out by the company. Liquids production totaled 1,393 thousand barrels per day (an increase of 4.6% year over year), and natural gas output came in at 2,894 million standard cubic feet per day (down 5.3%).
Chemicals and Products: In this segment, the London-based supermajor reported an adjusted loss of $66 million, improving from a much wider loss of $229 million incurred in the year-ago period. The favorable comparison was due to higher refining margins. Meanwhile, refinery utilization came in at 95%.
Integrated Gas: The unit reported an adjusted income of $1.7 billion, deteriorating from $2.2 billion in the October-December quarter of 2024. Results were primarily impacted by adverse tax implications, lower realized prices and higher costs, partly offset by an increase in production available for sale, which rose 4.8% from the fourth quarter of 2024 to 948 MBOE/d. Meanwhile, LNG sales volumes were up 27.7% year over year to 19.79 million tons.
Marketing: The segment recorded an income of $578 million (excluding items) during the quarter compared to the year-ago earnings of $839 million, due to lower margins and unfavourable tax movements.
Renewables and Energy Solutions: The segment incurred an adjusted income of $131 million, turning around from the year-ago loss of $311 million. The performance boost primarily reflects contributions from trading and optimisation, and energy marketing. External power sales were down 5.3% year over year to 72 terawatt hours, while piped gas sales edged down 3% to 160 terawatt hours.
Financial Performance
As of Dec. 31, 2025, the Zacks Rank #4 (Sell) company had $30.2 billion in cash and $75.6 billion in debt (including short-term debt). Net debt-to-capitalization was approximately 20.7%, up from 17.7% a year ago.
During the quarter under review, Shell generated cash flow from operations of $9.4 billion, returned $2.1 billion to its shareholders through dividends, and spent $6 billion in cash on capital projects.
The company’s cash flow from operations decreased more than 28% from the year-earlier level. Meanwhile, the group raked in $4.2 billion in free cash flow during the fourth quarter compared to $8.7 billion a year ago.
Guidance
Shell expects first-quarter 2026 upstream volumes of 1,700-1,900 MBOE/d, while Integrated Gas production is expected between 920 MBOE/d and 980 MBOE/d. The company also foresees marketing sales volumes of 2,550-2,750 thousand barrels per day and refinery utilization in the range of 90-98%. Meanwhile, Shell expects its total cash capital expenditure for full-year 2026 to range between $20 billion and $22 billion.
A Look At Other ‘Big Oil’ Earnings
While we have discussed Shell’s third-quarter results in detail, let’s take a look at some other Big Oil energy reports of this season.
American multinational ExxonMobil (XOM - Free Report) reported fourth-quarter 2025 earnings per share of $1.71 (excluding identified items), which beat the Zacks Consensus Estimate of $1.68. The bottom line also improved from the year-ago level of $1.67. ExxonMobil’s total quarterly revenues of $82.3 billion missed the Zacks Consensus Estimate of $83.2 billion. The top line decreased from the year-ago figure of $83.4 billion.
ExxonMobil’s better-than-expected quarterly earnings were fueled by higher oil equivalent production volumes and higher industry refining margins. The positives were partially offset by lower crude oil and natural gas price realizations.
Smaller rival Chevron (CVX - Free Report) reported adjusted EPS of $1.52, beating the Zacks Consensus Estimate of $1.44. The outperformance was backed by higher-than-expected production in the company’s key upstream segment and an 8% year-over-year reduction in costs during this quarter. Chevron’s output of 4.045 MBOE/d came in above the consensus mark of 4,009 MBOE/d. Importantly, the integrated oil and gas company hiked its quarterly cash dividend by 4% to $1.78 per share.
CVX recorded $10.8 billion in cash flow from operations compared with $8.7 billion in the year-ago period. Chevron’s free cash flow for the quarter was $4.2 billion. The company distributed a total of $27.1 billion in cash to its shareholders over this year.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Shell Q4 Earnings Miss as Lower Oil Prices Pressure Results
Key Takeaways
Europe’s largest oil company, Shell plc (SHEL - Free Report) , reported fourth-quarter 2025 earnings per ADS (on a current cost of supplies basis, excluding items — the market’s preferred measure) of $1.14, which came in below the Zacks Consensus Estimate of $1.21 due to a decline in oil prices and unfavourable tax adjustments, partly offset by higher hydrocarbon production. The bottom line also fell from the year-ago adjusted profit of $1.20.
Shell’s revenues of $66.7 billion were down slightly from $66.8 billion in fourth-quarter 2024 and missed the consensus mark by 2%.
Meanwhile, Shell repurchased $3.4 billion in shares in the fourth quarter. The London-based company expects another $3.5 billion worth of repurchases for the first quarter.
Shell PLC Unsponsored ADR Price, Consensus and EPS Surprise
Shell PLC Unsponsored ADR price-consensus-eps-surprise-chart | Shell PLC Unsponsored ADR Quote
Inside Shell’s Segments
Upstream: The segment recorded a profit of $1.6 billion (excluding items) during the quarter, down from $1.7 billion (adjusted) in the year-ago period. This primarily reflects the impact of lower prices and a decline in natural gas output.
At $58.61 per barrel, the group’s worldwide realized liquids prices were 17.1% below the year-earlier levels, while natural gas prices plunged 11.5%.
Shell’s upstream volumes averaged 1,892 thousand oil-equivalent barrels per day (MBOE/d), up 1.8% from the year-ago period, mainly due to a rise in oil churned out by the company. Liquids production totaled 1,393 thousand barrels per day (an increase of 4.6% year over year), and natural gas output came in at 2,894 million standard cubic feet per day (down 5.3%).
Chemicals and Products: In this segment, the London-based supermajor reported an adjusted loss of $66 million, improving from a much wider loss of $229 million incurred in the year-ago period. The favorable comparison was due to higher refining margins. Meanwhile, refinery utilization came in at 95%.
Integrated Gas: The unit reported an adjusted income of $1.7 billion, deteriorating from $2.2 billion in the October-December quarter of 2024. Results were primarily impacted by adverse tax implications, lower realized prices and higher costs, partly offset by an increase in production available for sale, which rose 4.8% from the fourth quarter of 2024 to 948 MBOE/d. Meanwhile, LNG sales volumes were up 27.7% year over year to 19.79 million tons.
Marketing: The segment recorded an income of $578 million (excluding items) during the quarter compared to the year-ago earnings of $839 million, due to lower margins and unfavourable tax movements.
Renewables and Energy Solutions: The segment incurred an adjusted income of $131 million, turning around from the year-ago loss of $311 million. The performance boost primarily reflects contributions from trading and optimisation, and energy marketing. External power sales were down 5.3% year over year to 72 terawatt hours, while piped gas sales edged down 3% to 160 terawatt hours.
Financial Performance
As of Dec. 31, 2025, the Zacks Rank #4 (Sell) company had $30.2 billion in cash and $75.6 billion in debt (including short-term debt). Net debt-to-capitalization was approximately 20.7%, up from 17.7% a year ago.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
During the quarter under review, Shell generated cash flow from operations of $9.4 billion, returned $2.1 billion to its shareholders through dividends, and spent $6 billion in cash on capital projects.
The company’s cash flow from operations decreased more than 28% from the year-earlier level. Meanwhile, the group raked in $4.2 billion in free cash flow during the fourth quarter compared to $8.7 billion a year ago.
Guidance
Shell expects first-quarter 2026 upstream volumes of 1,700-1,900 MBOE/d, while Integrated Gas production is expected between 920 MBOE/d and 980 MBOE/d. The company also foresees marketing sales volumes of 2,550-2,750 thousand barrels per day and refinery utilization in the range of 90-98%. Meanwhile, Shell expects its total cash capital expenditure for full-year 2026 to range between $20 billion and $22 billion.
A Look At Other ‘Big Oil’ Earnings
While we have discussed Shell’s third-quarter results in detail, let’s take a look at some other Big Oil energy reports of this season.
American multinational ExxonMobil (XOM - Free Report) reported fourth-quarter 2025 earnings per share of $1.71 (excluding identified items), which beat the Zacks Consensus Estimate of $1.68. The bottom line also improved from the year-ago level of $1.67. ExxonMobil’s total quarterly revenues of $82.3 billion missed the Zacks Consensus Estimate of $83.2 billion. The top line decreased from the year-ago figure of $83.4 billion.
ExxonMobil’s better-than-expected quarterly earnings were fueled by higher oil equivalent production volumes and higher industry refining margins. The positives were partially offset by lower crude oil and natural gas price realizations.
Smaller rival Chevron (CVX - Free Report) reported adjusted EPS of $1.52, beating the Zacks Consensus Estimate of $1.44. The outperformance was backed by higher-than-expected production in the company’s key upstream segment and an 8% year-over-year reduction in costs during this quarter. Chevron’s output of 4.045 MBOE/d came in above the consensus mark of 4,009 MBOE/d. Importantly, the integrated oil and gas company hiked its quarterly cash dividend by 4% to $1.78 per share.
CVX recorded $10.8 billion in cash flow from operations compared with $8.7 billion in the year-ago period. Chevron’s free cash flow for the quarter was $4.2 billion. The company distributed a total of $27.1 billion in cash to its shareholders over this year.