Solid cash flow allowed Shell (NYSE: SHEL) to keep the pace of its quarterly share buybacks and raise dividend despite posting weaker-than-expected earnings for the fourth quarter that were the lowest in more than four years.
The UK-based supermajor on Thursday reported adjusted earnings of $3.256 billion for the fourth quarter, down from $3.661 billion for the same period of 2024, and a 40% slump compared to the third quarter of 2025.
The Q4 earnings slightly missed the analyst estimates of about $3.5 billion, and were the lowest quarterly profits for Shell since the first quarter of 2021.
The supermajor attributed the decline in earnings to lower realized prices, unfavorable tax movements, and higher operating expenses.
As guided earlier this year, Shell’s chemicals division swung to a loss of $66 million from a profit of $550 million for the third quarter, on weak trading and optimization.
Cash flow from operating activities fell by 23% compared to the third quarter, while full-year cash flow from operating activities slumped by 22% to $42.863 billion, primarily due to tax payments of $11.6 billion and working capital outflows of $1.8 billion.
Despite the lower oil prices and weaker results, Shell didn’t change the pace of its share repurchases, announcing yet another $3.5 billion buybacks this quarter.
Some analysts expected Shell to trim share repurchases to $3 billion per quarter, but the supermajor did not.
“In Q4, despite lower earnings in a softer macro, cash delivery remained solid and today we announce a 4% increase in our dividend and $3.5 billion share buyback, making this the 17th consecutive quarter of at least $3 billion of buybacks,” chief executive officer Wael Sawan said.
Shell is raising its dividend per share by 4% to $0.372 for the fourth quarter, signaling it continues to prioritize shareholder payouts even as oil prices have dropped by about $10 per barrel in the past six months.
Shareholder distributions last year were about 52% of cash flow from operations (CFFO) of $42.9 billion.
“We generated free cash flow of $26 billion, made significant progress in focusing our portfolio and reached $5 billion of cost savings since 2022, with more to come,” Sawan said.
By Tsvetana Paraskova for Oilprice.com
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