Shell PLC (LSE:SHEL, NYSE:SHEL) shares started strongly on Thursday, rising 2.74%, after confirming it is continuing buybacks despite softer financials in the second quarter.
Income attributable to shareholders amounted to $3.6 billion for the quarter, down 25% year-on-year and down 25% compared to the first three months of the year.
Lower trading margins and weaker oil and gas prices weighed on the performance.
Earnings (adjusted) fell 24% to $4.26 billion, with EBITDA of $13.31 billion down 13% year-over-year.
Cash flow from operating activities, however, rose to $11.94 billion, up 29%, supporting the continuing shareholder returns. The free cash flow metric came in at $6.53 billion.
At $43.22 billion, net debt increased from $41.52 billion at the end of March.
Production averaged 2.68 million barrels oil equivalent per day in the quarter, down 5% of the same period last year. LNG volumes, meanwhile, were up 8% to 6.72 million tonnes.
Shell spent $3.5 billion on share buybacks in the quarter and paid out $2.1 billion in dividends.
And, today it committed to a further $3.5 billion spend on buy-backs in the current quarter.
In London, Shell shares were up 69p or 2.58%, changing hands at 2,748p.
“Shell delivered results that, while down on last year’s bumper profits, comfortably exceeded analyst expectations,” said Mark Crouch, analyst at eToro.
Crouch described the performance as ‘notably resilient’, and highlighted that Shell benefits from favourable comparison with US peers, as opposed to “its more volatile UK counterpart, BP”.
“Share buybacks and dividends remain a central part of the investment case … In a sector increasingly split between ambition (for energy transition) and pragmatism, Shell is positioning itself firmly in the latter camp, and for now, that stance seems to be paying off,” he added.