Shell PLC (LSE:SHEL, NYSE:SHEL) launched a new US$4bn share buyback as profits in the first quarter topped City expectations despite dropping from the previous quarter.
The oil giant reported adjusted earnings in the three months to March of US$9.65bn, down 2% from US$9.81bn in the previous quarter, but 5.3% higher than US$9.13bn in the same quarter in 2022. Adjusted EPS of US$1.39 climbed from US$1.20 a year prior. City analysts had expected earnings of around US$8bn.
The FTSE 100-listed firm said the US$4bn buyback is expected to be completed by the second quarter 2023 results announcement.
Adjusted earnings in Integrated Gas rose to US$4.92bn compared to US$4.09bn a year ago, while in the Upstream business earnings fell to US$2.80bn from US$3.45bn a year prior.
In Upstream, earnings were 18% lower than the previous quarter, reflecting lower realised prices (decrease of US$597mln), unfavourable deferred tax movements (decrease of US$370mln), partly offset by higher volumes and lower operating expenses.
Cash flow from operating activities for the first quarter 2023 was US$14.2bn and included a working capital outflow of US$0.8bn and tax payments of US$3.1bn.
The working capital outflow mainly reflected the reversal of temporary deposits from joint ventures received in the fourth quarter 2022, and other accounts receivable and payable movements, partly offset by initial margins inflows, and lower prices and inventories.
The firm also increased the dividend to US$0.2875 from US$0.25.