Shell 2025 Q1 Earnings Net Income Declines 34.5%
Friday, May 2, 2025 11:16 pm ET
24min read Revenue
Shell reported a 6.1% decrease in total revenue for the first quarter of 2025, amounting to $70.15 billion compared to $74.70 billion in the same period last year. The Integrated Gas segment generated $9.60 billion, while the Upstream sector contributed $1.51 billion. Marketing revenues reached $27.08 billion, and the Chemicals and Products division earned $21.61 billion. The Renewables and Energy Solutions segment brought in $9.42 billion, with the Corporate segment adding $12 million to the total third-party revenue of $69.23 billion.
Earnings/Net Income
Shell's EPS fell to $0.79 in Q1 2025 from $1.14 in Q1 2024, representing a 30.7% drop. Concurrently, net income declined to $4.88 billion, down 34.5% from the previous year's $7.44 billion. The EPS performance indicates a weaker quarter compared to last year.
Post-Earnings Price Action Review
The analysis of Shell’s post-earnings price action reveals mixed results in the short to medium term. The win rate for the stock price over a 3-day period following earnings was 28.57% for revenue, 50.00% for net income, and 35.71% for EPS. Over a 10-day period, the win rate improved to 50.00% for revenue, 75.00% for net income, and 50.00% for EPS. Meanwhile, the 30-day win rate was 35.71% for revenue, 50.00% for net income, and 35.71% for EPS, with the maximum return observed being 3.23% over 30 days for EPS. Overall, the data suggests that while earnings metrics can positively influence Shell’s stock price, the impact is inconsistent across different time frames.
CEO Commentary
Wael Sawan, CEO of Shell plc, described the first quarter of 2025 as delivering "another solid set of results," driven by a resilient balance sheet and strong performance in the LNG sector. He emphasized the completion of the Pavilion Energy acquisition, reinforcing Shell's commitment to liquefied natural gas as a growth driver. Despite a challenging market environment characterized by lower crude prices and demand uncertainties, Sawan expressed confidence in the company’s strategic direction, underlining ongoing investments aligned with the $20 billion to $22 billion budget for the year. The tone of his remarks conveyed cautious optimism regarding the company’s ability to navigate current challenges.
Guidance
For the second quarter of 2025, Shell expects cash capital expenditure to remain between $20 billion and $22 billion. Integrated Gas production is forecasted at approximately 890 to 950 thousand boe/d, with LNG liquefaction volumes anticipated to be around 6.3 to 6.9 million tonnes. Upstream production is projected at 1,560 to 1,760 thousand boe/d, while marketing sales volumes are expected to range from 2,600 to 3,100 thousand b/d. Corporate Adjusted Earnings are estimated to be a net expense of approximately $400 to $600 million.
Additional News
In recent strategic moves, Shell completed the acquisition of Pavilion Energy to bolster its LNG operations, showcasing a strategic focus on growth in high-value areas. The company also announced a $3.5 billion share buyback program to be executed over the next three months, reinforcing its commitment to shareholder returns. This program marks the 14th consecutive quarter where Shell has conducted buybacks of at least $3 billion. Furthermore, Shell announced divestments of onshore operations in Nigeria and the sale of its Energy and Chemicals Park in Singapore, aligning with its portfolio optimization strategy. These moves highlight Shell's ongoing efforts to streamline operations and focus on core strengths.
Ask Aime: What are Shell's strategic plans for the year, and how will they impact shareholder returns?
