Shell Q3 2025 slides: Adjusted earnings rise despite market headwinds

Introduction & Market Context

Shell plc (NYSE:SHEL) presented its third quarter 2025 results on October 30, highlighting improved financial performance despite missing analyst expectations. The oil and gas major reported adjusted earnings of $5.4 billion, up from $4.3 billion in the previous quarter, while maintaining its commitment to shareholder returns with a new share buyback program.

The company’s presentation comes amid a complex energy market environment, with Brent crude prices averaging $69 per barrel during the quarter, down from previous highs but still supporting profitable operations across Shell’s diverse portfolio.

Despite the earnings per share miss noted in Shell’s earnings call, where the company reported $0.93 EPS versus the $1.62 forecast, the stock remained relatively stable, trading slightly higher in pre-market at $75.58, up 0.04%.

Quarterly Performance Highlights

Shell’s third quarter results showed broad improvement across key financial metrics compared to the second quarter of 2025, driven by what the company described as "strong operational performance and higher trading contributions."

As shown in the following summary of key financial results:

Income attributable to Shell shareholders rose significantly to $5.3 billion, up from $3.6 billion in Q2 2025. Adjusted earnings increased to $5.4 billion from $4.3 billion, while adjusted EBITDA grew to $14.8 billion from $13.3 billion in the previous quarter.

The company’s cash flow performance was particularly strong, with cash flow from operations reaching $12.2 billion and free cash flow jumping to $10.0 billion, up from $6.5 billion in Q2. This improvement in cash generation allowed Shell to reduce its net debt to $41.2 billion, down from $43.2 billion at the end of the previous quarter.

The following slide illustrates the quarter-over-quarter improvement across key financial metrics:

Segment Performance

Shell’s presentation highlighted strong performance across its business segments, with the Upstream division continuing to be a major contributor to overall results. The company provided a detailed breakdown of adjusted earnings, adjusted EBITDA, and cash flow from operations by segment.

As shown in the segment performance breakdown below, Upstream generated the highest adjusted EBITDA at $6.6 billion, while also contributing significantly to cash flow from operations:

The presentation included an analysis of factors affecting the quarter-over-quarter change in adjusted earnings, highlighting the impact of prices, margins, volumes, and other operational factors. The cash conversion analysis demonstrated how Shell translated its earnings into cash flow, with minimal impact from working capital movements in the quarter.

Strategic Initiatives & Portfolio Actions

Shell outlined several strategic portfolio actions taken during 2025, categorized as growth initiatives, longevity projects, and portfolio high-grading. These actions span multiple geographies and business segments, reflecting the company’s global footprint and diversified approach.

Key developments highlighted in the presentation include the first cargo leaving LNG Canada, production restart at the Penguins field, completion of the Nigerian onshore (SPDC) sale, and first oil from Mero-4, among others. The company also noted its final investment decision on the HI gas development offshore Nigeria.

The following map illustrates Shell’s global portfolio actions during 2025:

Looking further ahead, Shell presented its pipeline of major projects, spanning upstream, liquefaction plants, chemicals and products, hydrogen, solar, carbon capture and storage, and offshore wind. These projects are designed to support the company’s strategic objectives while balancing traditional energy production with lower-carbon initiatives.

Capital Allocation & Shareholder Returns

Shell reaffirmed its commitment to shareholder returns, announcing a dividend of $0.358 per share for Q3 2025 and total shareholder distributions of $5.7 billion for the quarter. The company has distributed 48% of its cash flow from operations to shareholders over the trailing 12 months, in line with its target range of 40-50%.

The company announced its 16th consecutive quarterly share buyback program of at least $3 billion, slightly lower than the $3.5 billion mentioned in the earnings call. Cash dividends paid to shareholders in Q3 amounted to $2.1 billion, with share repurchases totaling $3.6 billion.

Shell’s capital allocation strategy, as outlined in the presentation, balances shareholder returns with investment in future growth while maintaining a strong balance sheet:

The company plans to maintain capital expenditure of $20-22 billion annually from 2025 to 2028, with approximately $12-14 billion allocated to Integrated Gas and Upstream segments and around $8 billion to Downstream and Renewables & Energy Solutions.

Forward-Looking Statements

Shell outlined its long-term strategic goals, focusing on delivering shareholder value while transitioning toward net-zero emissions by 2050. The company aims to achieve more than 10% net free cash flow per share growth annually through 2030 while distributing 40-50% of cash flow from operations to shareholders.

On the environmental front, Shell has committed to halving Scope 1 and 2 emissions under operational control by 2030, achieving near-zero methane emissions intensity, and reducing the net carbon intensity of products sold by 15-20% by 2030.

The following slide summarizes Shell’s strategic objectives combining financial returns and emissions reduction targets:

Despite these ambitious goals, Shell faces several challenges as noted in the earnings call, including potential oil market oversupply in 2026, ongoing challenges in the chemicals business, and persistent geopolitical risks that could impact energy markets and operations.

The company’s presentation emphasized its resilience amid market volatility, with CEO Wael Sawan stating during the earnings call, "We delivered a strong set of results despite the continued volatility we see." This sentiment reflects Shell’s confidence in its diversified business model and strategic direction, even as it navigates the complex landscape of energy transition and market fluctuations.

Full presentation:

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