Shell Shares (LON:SHEL) Move Higher On Q2 Profit Beat, $3.5B Share Buyback

Shell's share price (LON:SHEL) is moving higher today, as the firm reported better-than-expected second-quarter earnings, despite headwinds from lower oil and gas prices. The energy giant also announced another $3.5 billion share buyback program, reinforcing its commitment to shareholder returns in a boost to holders.

The company posted adjusted earnings of $4.26 billion for the second quarter, exceeding analyst estimates of $3.87 billion. This figure, however, represents a decrease from the $6.29 billion reported in the same period last year and the $5.58 billion in the first quarter of 2025.

Shell's decision to continue its share buyback program marks the 15th consecutive quarter of at least $3 billion in buybacks. This consistent return of capital underscores the company's focus on shareholder value.

Net debt at the end of the second quarter stood at $43.2 billion, up from $41.5 billion in the previous quarter. This increase reflects ongoing investment in strategic projects and shareholder distributions.

The company has also made significant strides in its cost-reduction efforts, achieving $800 million in structural cost reductions during the first half of the year. .

Despite Shell's outperformance, challenges remain. The integrated gas division experienced weaker trading results, and the chemicals and products arm faced losses, partly due to a fire at a U.S. chemical plant.

CEO Wael Sawan has emphasized a strategic shift from growth to value, prioritizing shareholder returns and streamlining operations. The company also firmly dismissed speculation about a potential takeover bid for BP, reaffirming its focus on internal investment and buybacks.

Looking to the areas of decline, the integrated gas division experienced a 30% drop in earnings from the previous quarter, whilst the chemicals and products division faced a significant 74% decline in adjusted earnings from the previous quarter.

Much of the downside in oil and gas had been priced in, leading into the report, with the buyback confirmation and improved earnings on the quarter supporting a move higher on the day. Despite this, Shell's shares continue to underperform over the past 12 months, with a decline of 4.5% on the period standing in stark contrast to the 9.7% growth seen by the FTSE 100 over the same period.