Earnings slide at Shell as oil price weakens

(Sharecast News) - Oil major Shell posted a slide in quarterly earnings on Thursday, after lower prices and a rise in operating expenses weighed heavily. Adjusted earnings tumbled 40% quarter-on-quarer in the final three months of 2025 to $3.3bn, narrowly missing analyst expectations for around $3.5bn. In the fourth quarter of 2024, adjusted earnings were $3.7bn.

Income attributable to Shell shareholders was $4.1bn, a 22% drop on the previous quarter.

Shell blamed the weaker earnings on "unfavourable tax movements...lower marketing margins, lower realised prices and higher operating expenses".

Over the full year, income rose 11% to $17.8bn, while adjusted earnings fell 22% to $18.5bn. Analysts had been looking for earnings of $18.8bn.

Global oil prices fell heavily in 2025, on the back of oversupply and tepid demand amid weaker economic conditions. Prices are expected to continue tracking lower throughout the first half.

However, despite the impact on earnings, the blue chip announced plans to return $3.5bn to investors through a share buyback, and raised its divided by 4%.

Wael Sawan, chief executive, said: "2025 was a year of accelerated momentum, with strong operational and financial performance across Shell.

"We generated free cash flow of $26bn, made significant progress in focusing our portfolio and reached $5bn of cost savings since 2022, with more to come."

As at 1130 GMT, Shell was trading 1% lower at 2,844.5p.

Dan Coatsworth, head of markets at AJ Bell, said: "Shell had primed the market to expect bad news, but even so, this is a pretty ugly set of numbers, with both earnings and revenue coming in appreciably below analyst forecasts.

"While volatility in commodity prices is a fact of life for energy companies, investors may be more concerned by rising operating expenses, something which should be within Shell's compass to control.

"Shell is attempting to keep investors on side with a further increase to the dividend and yet another share buyback. But with debt ticking higher, shareholders know this is not sustainable over the longer term without an improvement in the financial performance."