Shell Stock (NYSE:SHEL)
Shell (NYSE:SHEL) is up 1.3% in early trading on Thursday after posting Q1 adjusted profits greater than expected at $9.65 billion. This figure completely destroyed the $7.96 billion market consensus supplied by Vara Research. It allowed the company to continue its pace of share buybacks.
Shell stated that it would repurchase another $4 billion of shares, the same amount as in the previous quarter. Earlier this week, BP shares dropped by 8% after announcing a lesser quarterly buyback of $1.75 billion. Shell’s (NYSE:SHEL) announcement came shortly after BP’s announcement.
Citigroup analysts believe that in need of Shell stock to maintain its robust repurchase pace in the face of challenging macroeconomic conditions, the company will have little choice but to use its balance sheet.
The net debt decreased to $44.2 billion, more than $4 billion less than in the same quarter a year ago. Earnings for the first quarter were $9.13 billion, higher than the $9.13 billion recorded in the same quarter a year earlier.
Shell’s integrated gas business was crucial to the firm’s strong profit. The company reported adjusted profits of $4.9 billion in the first quarter of 2022, which was 18% lower than its earnings in the fourth quarter of 2022 but was still its second-best performance ever.
Although the price of natural gas was lower than in the same quarter a year ago, Shell (NYSE:SHEL) made up for the loss with higher volumes and lower operating expenses.
The total amount of oil and gas extracted in the first quarter was 970,000 boe, a 6% increase from the previous quarter and an 8% increase from the 896,000. Boe that was extracted in the first quarter of 2017.
The business said that the rise in Q/Q was due to reduced maintenance at its Prelude floating LNG plant in Australia, which is located in Australia.
Shell’s upstream sector had its adjusted profits drop 9% Q/Q and 18% Y/Y to $2.8B in the first quarter. At the same time, the company’s chemicals and products division saw its earnings soar 139% Q/Q and 52% Y/Y to $1.78B.
The capital markets day for Shell stock is scheduled for the following month. At that time, the company’s new CEO, Wael Sawan, will present his plan, which may or may not include any future changes to the dividend or the overall distribution structure.
Featured Image: Unsplash @ Keming Tan
Author Shariq Khan 
