Shell Launches $3.5 Billion Share Buyback After Q1 2025 Profit Surpasses Expectations
Shell launched a $3.5bn share buyback programme after better-than-expected first-quarter earnings this week, with the stock repurchase to be completed by the end of the year. The announcement demonstrates the company’s faith in its financial resilience and its strategic molding even as its profit slipped versus the previous year.
Shell, First Quarter 2025 Earnings: A Tangled Picture
Shell said its adjusted earnings were $5.58 billion for the first three months of the year, ahead of analysts’ expectations of $5.09 billion, according to a consensus compiled by the LSEG. Still, that figure is 28% lower than the $7.73 billion seen in the same period last year, reflecting weaker crude prices and a more muted demand picture. The results were down from last year, but were an improvement on the $3.66bn reported in the last quarter of 2014, suggesting some stabilization.
Shares in the company rose almost 3 percent in early trading on May 2, 2025, as investors wagered that Shell had positioned itself successfully to ride out market volatility. CEO Wael Sawan called the earnings “another solid set of results,” and pointed to the firm’s strong balance sheet and reliable operations.
Share Repurchase Program The New Buyback is for Shareholders
With this latest share repurchase program, worth $3.5 billion and to be completed in the next three months, Shell will have returned at least $3 billion by way of buybacks each quarter for the last 14 quarters. The move emphasises Shell’s continued focus of returning value to shareholders, even during the current economic storm. In its fiscal Q1 2025, the company returned $5.5 billion to stockholders through $3.3 billion in share repurchases and $2.2 billion in cash dividends, according to X posts.
“Our strong performance and a resilient balance sheet have given us the confidence to launch another $3.5 billion of buybacks,” Sawan said in a statement. This approach is consistent with Shell’s aim to distribute 40-50% of cash flow from operations to cover dividends and share buybacks as announced at its Capital Markets Day in March 2025.
Steering a Challenging Market: Oil Prices and Geopolitical Risks
Shell has performed well as the broader oil industry has faced serious challenges. Brent crude futures were quoted at $61.78 a barrel on May 2, 2025, against $83 a year ago, a reflection of softer demand and worries of oversupply. Bank of America analysts wrote it in a note that rumors OPEC leader Saudi Arabia may scale back its commitment to keeping oil prices in check have added another layer of uncertainty around Big Oil.
Complicating matters, U.S. President Donald Trump’s trade policies have been incredibly volatile, spooking investors and resulting in a careful approach for energy investors. Still, thanks to Shell’s focus on cost discipline and portfolio optimization, it has been able to outpace competitors, including BP, which scaled back its share buyback program last month after falling short of profit estimates.
Intelligent Decision Making: LNG Focus and Reduced Costs
Shell is doubling down on its liquefied natural gas (LNG) business as it sees a decade of robust growth that no other energy market can currently match. The company has most recently bolstered its LNG portfolio through the purchase of Pavilion Energy and sold Nigerian and Singaporean assets to focus its business. Shell also reached annualised costs savings of $3.1 billion by the end of 2024, beating $2-$3 billion goal by a year.
The company reconfirmed its 2025 capital spending budget of $20 billion to $22 billion, a sign of discipline in investment spending. Shell’s shift to LNG and lower carbon fuels, along with with its global retail network of 47,000 service stations, also leaves it better placed than most to respond to changing energy needs and remain profitable in its core operations of oil and gas.
What Lies Ahead for Shell?
For all intents and purposes, Shell’s impressively defined the playbook for energy investors when the company disclosed first-quarter numbers and a share repurchase plan, but all is not flawless. The company has been criticized for its decision to keep oil production flat until 2030, particularly given ties of investments in renewables and energy solutions represented just 8% of its capex in Q3 2024. Balancing profit with green will be a key challenge for Shell as it steers through the energy transition.
In the meantime Shell’s ability to keep delivering healthy returns to shareholders, and outperform consensus expectations on earnings, lends solid support. But with oil prices and geopolitics continuing to be fickle, the company’s ability to remain agile will be key to carrying momentum into 2025 and beyond.
Disclaimer: This article is for informational purposes only and does not constitute financial or investment advice. Always conduct your own research before making decisions.
