Shell Q2 Earnings Beat Even as Production & Oil Prices Fall

Europe’s largest oil company, Shell plc SHEL, reported second-quarter 2025 earnings per ADS (on a current cost of supplies basis, excluding items — the market’s preferred measure) of $1.42, which came in well above the Zacks Consensus Estimate of $1.13 on the back of cost reductions and higher natural gas realizations.

However, the bottom line fell from the year-ago adjusted profit of $1.97 due to lower upstream production plus a decline in oil prices.

Shell’s revenues of $66.4 billion were down from $75.1 billion in second-quarter 2024 and missed the consensus mark by 9.9%.

Meanwhile, Shell repurchased $3.5 billion in shares in the second quarter. The London-based company expects another $3.5 billion worth of repurchases for the third 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 $1.7 billion (excluding items) during the quarter, down from $2.3 billion (adjusted) in the year-ago period. This primarily reflects the impact of lower production and oil prices.

At $63.62 per barrel, the group’s worldwide realized liquids prices were some 19% below the year-earlier levels, but natural gas prices rose roughly 11%.

Shell’s upstream volumes averaged 1,732 thousand oil-equivalent barrels per day (MBOE/d), down 2.9% from the year-ago period, mainly due to a dip in natural gas churned out by the company. Liquids production totaled 1,334 thousand barrels per day (an increase of 2.9% year over year), and natural gas output came in at 2,310 million standard cubic feet per day (down 18%).

Chemicals and Products: In this segment, the London-based supermajor reported an adjusted profit of $118 million, plunging more than 89% from $1.1 billion earned in the year-ago period. The unfavorable comparison was due to lower margins. Meanwhile, refinery utilization came in at 94%.

Integrated Gas: The unit reported an adjusted income of $1.7 billion, deteriorating from $2.7 billion in the April-June quarter of 2024. Results were primarily impacted by lower production available for sale, which fell 6.8% from the second quarter of 2024 to 913 MBOE/d. However, LNG sales volumes were up 8.3% year over year to 17.77 million tons.

Marketing: The segment recorded an income of $1.2 billion (excluding items) during the quarter compared to the year-ago earnings of $1.1 billion, due to higher margins and favorable tax movements. 

Renewables and Energy Solutions: The segment incurred an adjusted loss of $9 million, reflecting an improvement from the year-ago loss of $187 million. The performance boost primarily reflects lower operating expense and favorable tax movements. External power sales were down 5.4% year over year to 70 terawatt hours, while piped gas sales fell 10.8% to 132 terawatt hours.

Financial Performance

As of June 30, 2025, the Zacks Rank #3 (Hold) company had $32.7 billion in cash and $75.7 billion in debt (including short-term debt). Net debt-to-capitalization was approximately 19.1%, up from 17% a year ago. 

You can see the complete list of today’s Zacks #1 Rank stocks here.

During the quarter under review, Shell generated cash flow from operations of $11.9 billion, returned $2.1 billion to its shareholders through dividends, and spent $5.4 billion on capital projects.

The company’s cash flow from operations decreased 11.6% from the year-earlier level. Meanwhile, the group raked in $6.5 billion in free cash flow during the second quarter compared to $10.2 billion a year ago.

Guidance

Shell expects third-quarter 2025 upstream volumes of 1,700-1,900 MBOE/d, while Integrated Gas production is expected between 910 MBOE/d and 970 MBOE/d. The company also foresees marketing sales volumes of 2,600-3,100 thousand barrels per day and refinery utilization in the range of 88-96%.

Important Energy Earnings So Far

While we have discussed Shell’s second-quarter results in detail, let’s take a look at some other Big Oil energy reports of this season.

American multinational ExxonMobil XOM reported second-quarter 2025 earnings per share of $1.64 (excluding identified items), which beat the Zacks Consensus Estimate of $1.49. The bottom line, however, declined from the year-ago level of $2.14. ExxonMobil’s total quarterly revenues of $81.5 billion missed the Zacks Consensus Estimate of $82.8 billion. The top line decreased from the year-ago figure of $93.1 billion.

ExxonMobil’s better-than-expected quarterly earnings were fueled by higher liquid production from the United States and stronger industry refining margins resulting from higher seasonal demand and increased volumes. The positives were partially offset by lower crude oil and natural gas prices.

Smaller rival Chevron CVX reported adjusted EPS of $1.77, beating the Zacks Consensus Estimate of $1.70. The outperformance stemmed from higher-than-expected production in the company’s key upstream segment. The company’s output of 3,396 MBOE/d — a record — came in above the consensus mark of 3,326 MBOE/d. Healthy gain in natural gas realizations and stronger refined product sales margins also played their part. 

Chevron recorded $8.6 billion in cash flow from operations compared to $6.3 billion in the year-ago period due to the absence of prior-year working capital outflows and higher cash distributions from Kazakhstan. Chevron’s free cash flow for the quarter was $4.9 billion.

London-based BP plc BP reported second-quarter 2025 adjusted EPS of 90 cents. The figure beat the Zacks Consensus Estimate of 68 cents but declined from the year-ago reported figure of $1.00. BP’s better-than-expected quarterly earnings can be primarily attributed to higher oil production, which was partially offset by lower price realizations.

BP expects third-quarter 2025 upstream production to dip slightly from the prior-quarter level. It also anticipates a seasonal rise in customers’ business volumes and a significant decline in its refinery turnaround activity. Taxes are projected to increase by about $1 billion due to payment timing.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research