British oil major Shell reported its weakest quarterly profit in nearly five years on Thursday, a slump attributed to a softer crude price environment and unfavorable tax adjustments in the fourth quarter.
Crude oil prices hovered around $60 per barrel in the last quarter of 2025 as oversupply concerns dampened sentiments among investors.
Q4 earnings miss and 2026 outlook
Shell missed Wall Street expectations in its fourth-quarter earnings report. The company posted Non-GAAP earnings per ADS of $1.12, which was $0.17 below estimates.
Shell reported adjusted earnings of $3.3 billion for the fourth quarter of 2025, alongside $9.4 billion in cash flow from operations.
The company missed analyst expectations of $3.5 billion, according to an LSEG-compiled consensus.
Revenue for the quarter totaled $64.09 billion, falling short of projections by $1.73 billion and representing a 3.3% decline compared to the previous year.
The company’s outlook for 2026 includes projected cash capital expenditures in the range of $20 billion to $22 billion, with specific production and utilisation targets planned across its business segments.
Global operational profile and reserves
Shell is a leading integrated global energy company, deeply involved in all aspects of the oil and gas industry.
Its extensive operations span the globe, encompassing the exploration for new reserves, the production of crude oil and natural gas, and the refining of these raw materials into various petroleum products.
The company remains a major global producer, showcasing significant output figures.
In 2024, Shell’s production capacity was considerable, generating an average of 1.5 million barrels of liquids and a substantial 7.7 billion cubic feet of natural gas daily, underscoring its pivotal role in meeting the world’s energy demands.
As of year-end 2024, the company’s total reserves were 9.6 billion barrels of oil equivalent, with liquids accounting for 48% of this total.
These production and reserve assets are distributed across Europe, Asia, Oceania, Africa, North America, and South America.
The company’s refining capacity stands at 1.6 million barrels per day (mmb/d) across facilities located in the Americas, Asia, and Europe.
Full-year performance and shareholder action
Furthermore, it has a substantial chemicals business, selling approximately 12 million tons annually.
The largest chemical production sites are often integrated with local refineries and are situated in Central Europe, China, Singapore, and North America.
Meanwhile, Shell’s adjusted earnings for the full-year 2025 fell short of expectations, reaching $18.5 billion.
This figure represents a decline from the $23.72 billion in annual profit reported a year prior.
“I’d start off by saying it was actually a very strong operational quarter for us,” Shell CEO Wael Sawan was quoted as saying in a CNBC report.
A few things hurt us this quarter. Number one was some tax adjustments which went against us, chemicals has indeed been weak, but I would look to the strength actually of our integrated gas, upstream and marketing businesses.
The company has declared a 4% rise in its dividend, bringing it to $0.372 per share. Furthermore, a $3.5 billion share buyback program was announced. This marks the 17th quarter in a row that the company has authorised buybacks of $3 billion or more.
Net debt increased to $45.7 billion by year-end, resulting in a gearing of 20.7%. This compares to the end of the third quarter, when net debt stood at $41.2 billion, and gearing was 18.8%.
Shell’s London-listed shares saw a decline of 1.1% in trading. Despite this drop, the stock has still appreciated by approximately 2.7% since the beginning of the year.
Lower oil prices are forcing European energy majors to make difficult decisions, with a challenging market and expected weak earnings season putting shareholder payouts at risk.
Upon taking the job about three years ago, Shell’s Sawan stated that his goal was to instill a high-performance culture within the company.
Fourth-quarter earnings reports are anticipated next week from both Britain’s BP and France’s TotalEnergies.
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