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Investing.com -- Shares of Shell Plc (LON:SHEL) rose more than 3% Friday after the energy giant reported first-quarter adjusted earnings of $5.6 billion, exceeding consensus estimates by 12%, driven by strong results in its integrated gas, upstream and marketing divisions.
The London-based company said adjusted earnings were up more than 50% from the previous quarter, supported by improved trading performance, lower depreciation and fewer well write-offs.
Shell announced a $3.5 billion share buyback, marking the 14th consecutive quarter of buybacks exceeding $3 billion.
Shareholder distributions equaled 45% of cash flow from operations over the past year, in line with Shell’s target range of 40–50%.
Integrated Gas earnings rose to $2.5 billion, up from $2.2 billion in the fourth quarter, with total liquefied natural gas (LNG) sales volumes of 16.5 million metric tons. Liquefaction volumes dipped slightly, as expected.
Shell completed its acquisition of Pavilion Energy during the quarter, a move analysts at RBC Capital Markets said positions Shell for material increases in LNG sales volumes later in the year, alongside new supply from the Calcasieu Pass and the forthcoming LNG Canada project.
Upstream earnings rose to $2.3 billion, up from $1.7 billion, aided by improved realizations and steady production of 1.855 million barrels of oil equivalent per day. Barclays (LON:BARC) noted upstream net income per barrel at $18.60, despite a decline in benchmark Brent prices.
Marketing posted $900 million in earnings, the strongest quarterly performance in lubricants since 2017 and mobility since 2020.
Chemicals and Products earned $449 million, boosted by stronger refining margins, with refinery utilization increasing to 85%.
Renewables and Energy Solutions reported a narrowed loss of $42 million, compared with a $300 million loss in the previous quarter. Total (EPA:TTEF) installed renewable capacity reached 7.5 gigawatts.
Operating cash flow excluding working capital came in at $11.9 billion, above Visible Alpha consensus of $11.6 billion.
Cash flow from operations after working capital was $9.3 billion, reflecting a $2.7 billion seasonal outflow. Capital expenditures were $4.2 billion.
Net debt rose to $41.5 billion from $38 billion, largely due to lease additions and loans related to the Pavilion acquisition and Nigerian asset divestment. Gearing increased to 18.7%, up one percentage point.
The company maintained full-year capital expenditure guidance of $20 billion to $22 billion.
Second-quarter guidance includes upstream production of 1.56 million to 1.76 million barrels per day and LNG liquefaction of 6.3 million to 6.9 million metric tons.
Marketing sales volumes are expected between 2.6 million and 3.1 million barrels per day, with refinery utilization seen rising to as high as 95%.
Chief executive Wael Sawan said in a statement the company “further strengthened its leading LNG business” and continued to “high-grade its portfolio” through recent divestments in Nigeria and Singapore.