Shell Q4 Earnings Miss on Lower Prices, Still Raises Dividend

Europe’s largest oil company, Shell plc SHEL, reported fourth-quarter 2024 earnings per ADS (on a current cost of supplies basis, excluding items — the market’s preferred measure) of $1.20. The bottom line came in well below the Zacks Consensus Estimate of $1.78 and fell from the year-earlier quarter’s earnings of $2.22 per American Depositary Share (ADS), dragged down by weaker realized prices, drop in trading margins and lower LNG sales.Find the latest EPS estimates and surprises on Zacks Earnings Calendar.Shell’s revenues of $66.8 billion were down from $80.1 billion in fourth-quarter 2023 and missed the consensus mark by 16.6%.Meanwhile, Shell repurchased $3.6 billion of shares in the fourth quarter and hiked its dividend by 5%. The London-based company expects another $3.5 billion worth of repurchases for the first quarter.Shell PLC Unsponsored ADR Price, Consensus and EPS Surprise Shell PLC Unsponsored ADR price-consensus-eps-surprise-chart | Shell PLC Unsponsored ADR QuoteInside Shell’s SegmentsUpstream: The segment recorded a profit of $1.7 billion (excluding items) during the quarter, down from $3.1 billion (adjusted) in the year-ago period and below the Zacks Consensus Estimate of $2 billion. This primarily reflects the impact of lower oil and gas prices.At $70.69 per barrel, the group’s worldwide realized liquids prices were 11% below the year-earlier levels, while natural gas prices fell 7%.Shell’s upstream volumes averaged 1,859 thousand oil-equivalent barrels per day (MBOE/d), down a marginal 0.6% from the year-ago period but ahead of the Zacks Consensus Estimate of 1,851 MBOE/d, mainly due to new crude production. Liquids production totaled 1,332 thousand barrels per day (a decrease of 2.1% year over year) and natural gas output came in at 3,056 million standard cubic feet per day (up 3.5%).Chemicals and Products: In this segment, the London-based supermajor reported an adjusted loss of $229 million, reversing from a profit of $29 million in the year-ago period. The unfavorable comparison was due to a drop in trading and optimization margins, weak realized prices and unfavorable tax movements. Meanwhile, refinery utilization came in at 76% compared with 81% during the December-end quarter of 2023. The figure was also lower than the consensus mark of 78%.Integrated Gas: The unit reported an adjusted income of $2.2 billion, deteriorating from $4 billion in the October-December quarter of 2023 and below the Zacks Consensus Estimate of $2.8 billion. Results were primarily impacted by lower LNG sales volumes, which fell 14.3% from the fourth quarter of 2023 to 15.50 million tons (consensus called for 16.23 million tons). Total Integrated Gas production remained essentially flat year over year at 905 MBOE/d.Marketing: The segment recorded an income of $839 million (excluding items) during the quarter compared to the year-ago earnings of $794 million due to lower operating expenses. The Zacks Consensus Estimate pegged the Marketing unit income at $885 million. Renewables and Energy Solutions: The segment logged an adjusted loss of $311 million, reflecting a deterioration from the year-ago income of $173 million and underperforming the consensus mark by $44 million. The performance blip reflects adverse tax effects and rising costs. External power sales were up 12% year over year to 76 terawatt hours, though piped gas sales fell 6% to 165 terawatt hours.Financial PerformanceAs of Dec. 31, 2024, the Zacks Rank #3 (Hold) company had $39.1 billion in cash and $77.1 billion in debt (including short-term debt). Net debt-to-capitalization was approximately 17.7%, down from 18.8% 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 $13.2 billion, returned $2.1 billion to its shareholders through dividends and spent $6.5 billion on capital projects.The company’s cash flow from operations increased 4.7% from the year-earlier level. Meanwhile, the group raked in $8.7 billion in free cash flow during the fourth quarter compared to $6.9 billion a year ago.GuidanceShell expects first-quarter 2025 upstream volumes of 1,750-1,950 MBOE/d, while Integrated Gas production is expected between 930 MBOE/d and 990 MBOE/d. The company also foresees marketing sales volumes of 2,500-3,000 thousand barrels per day and refinery utilization in the range of 80-88%.Important Energy Earnings So FarWhile we have discussed Shell’s fourth-quarter results in detail, let’s take a look at some other key oil/energy reports of this season so far.Oil service biggie SLB SLB reported fourth-quarter 2024 adjusted earnings per share of 92 cents, ahead of the Zacks Consensus Estimate of 90 cents and higher than the year-ago quarter’s profit of 86 cents. The robust numbers reflect broad-based growth and margin expansion, especially in the Middle East and Asia. Additionally, advancements in AI and autonomous operations continue to contribute significantly to SLB’s results.Along with the quarterly earnings, SLB announced approvals from the board of directors to hike quarterly dividends by 3.6%. The company has also decided on an accelerated share repurchase (“ASR”) program involving the repurchase of $2.3 billion of its common stock. Notably, the ASR is part of SLB’s broader plan to return a minimum of $4 billion to its shareholders in 2025 through dividends and stock repurchases.Refining major Valero Energy VLO reported fourth-quarter 2024 adjusted earnings of 88 cents per share, which beat the Zacks Consensus Estimate of 13 cents. Total quarterly revenues of $30.8 billion beat the Zacks Consensus Estimate by $27 million. Better-than-expected quarterly results can be primarily attributed to an increase in renewable diesel margins and lower total cost of sales.VLO’s fourth-quarter capital investment totaled $547 million, of which $452 million was allocated toward sustaining the business. The company had cash and cash equivalents of $4.7 billion at the end of the fourth quarter. As of Dec. 31, 2024, it had a total debt of $8.1 billion and finance lease obligations of $2.4 billion.  Energy infrastructure provider Kinder Morgan KMI reported fourth-quarter adjusted earnings per share of 32 cents, shy of the Zacks Consensus Estimate of 33 cents. The lower-than-expected quarterly earnings were primarily due to decreased volumes on certain systems, asset divestitures, and lower crude, CO2 and NGL volumes. KMI’s fourth-quarter DCF was $1.3 billion, up from $1.2 billion a year ago.As of Dec. 31, 2024, Kinder Morgan reported $88 million in cash and cash equivalents. Its long-term debt amounted to $29.8 billion at the quarter-end. For 2025, Kinder Morgan projects a net income of $2.8 billion, up 8% from the 2024 level, and an adjusted EPS of $1.27, up 10%. The company expects to declare dividends of $1.17 per share, up 2% from the prior-year figure. It also anticipates budgeted adjusted EBITDA of $8.3 billion, up 4% from the previous year’s level.Zacks' Research Chief Names "Stock Most Likely to Double"Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.This top pick is among the most innovative financial firms. With a fast-growing customer base (already 50+ million) and a diverse set of cutting edge solutions, this stock is poised for big gains. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.Free: See Our Top Stock And 4 Runners UpWant 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 Schlumberger Limited (SLB): Free Stock Analysis Report Valero Energy Corporation (VLO): Free Stock Analysis Report Kinder Morgan, Inc. (KMI): Free Stock Analysis Report Shell PLC Unsponsored ADR (SHEL): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks