Shell Q4 Earnings: Can Upstream Gains Offset Weak Spots?

Shell plc SHEL is set to release fourth-quarter results on Feb. 5. The Zacks Consensus Estimate for earnings is $1.21 per share on revenues of $68.1 billion.

Let’s delve into the factors that might have influenced the integrated energy behemoth’s results for the December quarter. But it’s worth taking a look at SHEL’s previous-quarter performance first.

Highlights of Q3 Earnings & Surprise History

In the last reported quarter, Europe’s largest oil company beat the consensus mark on the back of cost reductions and robust oil volumes. SHEL had reported earnings per ADS (on a current cost of supplies basis, excluding items — the market’s preferred measure) of $1.86, topping the Zacks Consensus Estimate of $1.72. However, revenues of $70.4 billion missed the Zacks Consensus Estimate by nearly 6% due to a decline in oil prices.

Shell beat the Zacks Consensus Estimate for earnings in three of the last four quarters and missed in the other, resulting in an earnings surprise of 5.2%, on average. This is depicted in the graph below:

Shell PLC Unsponsored ADR Price and EPS Surprise

Shell PLC Unsponsored ADR price-eps-surprise | Shell PLC Unsponsored ADR Quote

Trend in Estimate Revision

The Zacks Consensus Estimate for the fourth-quarter bottom line has remained unchanged in the past seven days. The estimated figure indicates a marginal 0.8% improvement year over year. The Zacks Consensus Estimate for revenues, meanwhile, suggests a 1.9% increase from the year-ago period.

Factors to Consider

Last month, Shell issued an updated outlook for the fourth quarter of 2025, offering an insight into how one of the world’s largest integrated energy companies is positioning itself across the key business segments. 

Shell’s marketing division is forecasted to have faced headwinds in the fourth quarter, with adjusted earnings expected to be under pressure. Seasonal factors likely contributed to weaker performance, as colder temperatures in the Northern Hemisphere often lead to lower demand for certain energy products, including refined fuels and natural gas.

The company also disclosed that its chemicals sub-segment may have seen a considerable loss in adjusted earnings for the fourth quarter. The chemicals and products division, which has been a significant area of focus for Shell in recent years, has encountered a variety of challenges, from volatile raw material costs to shifting market demands.

On a positive note, Shell’s upstream division production is expected to have been between 1.84 million and 1.94 million barrels of oil equivalent per day (boe/d). This represents a slight increase compared with the 1.83 million boe/d produced in third-quarter 2025 due to the incorporation of Adura JV.

What Does Our Model Say?

The proven Zacks model does not conclusively predict an earnings beat for SHEL this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of beating estimates. But that’s not the case here.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: Shell has an Earnings ESP of 0.00%. This is because the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at $1.21 per share each.

Zacks Rank: Shell currently carries a Zacks Rank #4 (Sell).

Stocks to Consider

While an earnings beat looks uncertain for Shell, here are some firms from the energy space that you may want to consider on the basis of our model:

Helmerich & Payne HP has an Earnings ESP of +22.11% and a Zacks Rank #2. The firm is scheduled to release earnings on Feb. 4.

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

The Zacks Consensus Estimate for fiscal 2026 sales of Helmerich & Payne indicates 4.8% growth. Valued at around $3.4 billion, HP has gained 8.6% in a year.

Patterson-UTI Energy PTEN has an Earnings ESP of +19.15% and a Zacks Rank #3. The firm is scheduled to release earnings on Feb. 4. 

Patterson-UTI Energy beat the Zacks Consensus Estimate for earnings in two of the last four quarters and missed in the other two, with the average being 17.5%. Valued at nearly $3 billion, PTEN has lost 4.5% in a year.

Phillips 66 PSX has an Earnings ESP of +0.88% and a Zacks Rank #3. The firm is scheduled to release earnings on Feb. 4.

Phillips 66 beat the Zacks Consensus Estimate for earnings in three of the last four quarters and missed in the other, with the average being 18.3%. Valued at nearly $58 billion, PSX has gained 21.8% in a year.

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

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