Shell plc (SHEL) Earnings
Shell plc is expected to report next earnings on July 30, 2026 (in NaN days), with a consensus EPS estimate of $2.91. SHEL has beaten EPS estimates in 8 of its last 12 reported quarters (average surprise +10.5% over the last four).
| Report date | EPS est | EPS actual | Surprise | Revenue | Rev. surprise |
|---|---|---|---|---|---|
| May 7, 2026 | $2.14 | $2.44 | +14.0% | $69.7B | -10.1% |
| Feb 5, 2026 | $1.21 | $1.14 | -5.8% | $64.0B | -8.0% |
| Oct 30, 2025 | $1.72 | $1.86 | +8.1% | $67.7B | +0.0% |
| Jul 31, 2025 | $1.13 | $1.42 | +25.7% | $65.4B | -6.9% |
| May 2, 2025 | $1.54 | $1.84 | +19.5% | $69.2B | -2.3% |
| Jan 30, 2025 | $1.74 | $1.20 | -31.0% | $66.3B | +1.9% |
| Oct 31, 2024 | $1.66 | $2.36 | +42.2% | $71.1B | +15.9% |
| Aug 1, 2024 | $1.82 | $1.97 | +8.2% | $74.5B | +21.4% |
| May 2, 2024 | $1.87 | $2.38 | +27.3% | $72.5B | -11.7% |
| Feb 1, 2024 | $1.94 | $2.22 | +14.4% | $78.7B | +2.4% |
| Nov 2, 2023 | $1.85 | $1.86 | +0.5% | $76.4B | -8.8% |
| Jul 27, 2023 | $1.59 | $1.50 | -5.7% | $74.6B | +11.6% |
Source: company filings + earnings calendar. For informational purposes only — not investment advice.
Earnings call summary
Q1 FY2026 · May 9, 2026
AI summary of management’s prepared remarks and analyst Q&A. For informational purposes only — not investment advice.
Management highlights
### Overall Financial Results - Adjusted Q1 2026 earnings came in just under $7 billion, with over $17 billion in operating cash flow (excluding working capital). - An $11 billion working capital outflow was recorded in the quarter, driven by higher commodity prices impacting inventory and receivables; management expects most of this outflow to reverse over time. - Net debt at end-Q1 was $52.6 billion, or $22 billion excluding noncash variable shipping lease components, leaving the balance sheet strongly positioned for volatility. ### Operational Impact of Middle East Conflict - Around 1/5 of Shell's global hydrocarbon production comes from the Middle East; Oman production (10% of global volumes, which do not transit the Strait of Hormuz) remains unaffected. - The most significant impact is in Qatar: Pearl GTL Train 2 was damaged (no injuries), and is expected to take ~1 year to repair, with total repair costs estimated to be well below $0.5 billion. Pearl GTL Train 1 and the joint venture Qatari LNG train are start-up ready, pending safe transit through the Strait of Hormuz. ### Portfolio Strategy Updates - Completed the divestment of the non-core Jiffy Lube network for $1.3 billion. - Added new upstream and integrated gas acreage in the U.S., Kazakhstan, and Venezuela to extend resource longevity. - Announced the strategic acquisition of ARC Resources, a low-cost operator in Canada's Montney basin, which complements Shell's existing Canadian positions. The deal adds contiguous acreage, long-duration low carbon intensity production, and increases expected compound annual production growth to 2030 from 1% to 4% (vs 2025 levels). The acquisition is structured as 75% share / 25% cash, meets Shell's double-digit return requirement for M&A, and preserves balance sheet strength. ### Shareholder Distribution - Announced a 5% increase to the dividend and a $3 billion share buyback program for the next three months, consistent with the existing 40% to 50% through-the-cycle distribution policy for cash flow from operations. - Cost Reduction Progress - Shell has already delivered $5.1 billion of the targeted $5 billion to $7 billion in structural OpEx reductions announced at the 2025 Capital Markets Day, and remains on track to reach the $7 billion target. Year-over-year Q1 OpEx increased less than 2%, which management notes offsets the impact of broader market inflation.
Guidance
- Full year 2026 cash CapEx guidance is revised upward to $24 billion to $26 billion, including ~$4 billion in cash costs for the ARC Resources acquisition. - 2027 and 2028 cash CapEx guidance remains unchanged at $20 billion to $22 billion, as ARC's ongoing capital requirements will be absorbed into existing planned spending. - The 40% to 50% through-the-cycle distribution of cash flow from operations to shareholders remains unchanged, with dynamic allocation between dividends and buybacks. - Management expects the majority of the $11 billion Q1 2026 working capital outflow to reverse over time as commodity prices stabilize. - Price lag effects from Q1 2026 high commodity prices are expected to positively impact Integrated Gas and Chemicals results in Q2 2026. - Q2 2026 will be more challenging for the lubricants business following the Pearl GTL outage, despite long-term fundamentals remaining positive.
Segment performance
Upstream: Delivered strong operational performance, including record production in Brazil, a turnaround completed 10 days ahead of schedule at Nigeria's Bonga, and the Mars platform in the Gulf of America becoming the first asset in the region to reach 1 billion barrels of cumulative oil production. No standalone Q1 2026 revenue figure was provided for the segment, though the segment contributed to the company's overall $7 billion adjusted earnings. Integrated Gas: The ramp-up of LNG Canada partially offset production impacts from Australian cyclones and the shutdown of Qatar production. LNG trading and optimization results were in line with the prior quarter, with price lags from term contracts delaying current high price monetization. The segment faces near-term Q2 volume losses from the damaged Pearl GTL Train 2 in Qatar, which will be out of service for ~1 year. Chemicals: Margins remained depressed in Q1, but the business achieved free cash flow positive (excluding working capital) in the quarter, with cost-cutting initiatives delivering hundreds of millions of dollars in OpEx and CapEx reductions. Early signs of margin improvement are expected to carry into Q2, with price lag effects also providing a tailwind. Products: Strong Q1 results driven by 99% refining utilization and significantly higher trading and optimization contributions. Marketing: Delivered another strong quarter despite higher March feedstock prices, with seasonally higher lubricant sales and optimized product flows across business units boosting overall segment results. Lubricant EBITDA was 30% higher than the highest result in recent years, partially driven by customer advance liftings ahead of expected Pearl GTL supply disruptions.
Risks & headwinds
- Heightened macro volatility and geopolitical uncertainty from the ongoing Middle East conflict, including ongoing risks to safe transit through the Strait of Hormuz that disrupts Qatari production exports. - Persistent global crude supply shortage (estimated at ~1 billion barrels currently, with the shortage deepening over time), which has driven higher commodity prices and can lead to demand curtailment in some segments. - Inflationary pressure on supply chains (running at ~5% overall, with higher pressure for subsea equipment and FPSOs) that could increase operating and capital costs. - Proposed Australian regulatory changes requiring 20% of East Coast LNG production to be reserved for the domestic market, which could impact volumes available for export from Shell's Crux gas field, though management notes the impact will be limited as Shell already supplies ~15% of production to the domestic market. - Chemical margins remain depressed, and the success of any potential sale or capital markets transaction for the U.S. chemicals business is not guaranteed.
Analyst Q&A
Q: The shift toward a higher dividend over larger share buybacks this quarter: is this value-led, driven by market pricing, or tied to post-M&A balance sheet strengthening? What is the magnitude of price lag effects in Integrated Gas that will impact future quarters?
A: The distribution rebalancing is dynamic value-led capital allocation, aligned with the unchanged 40% to 50% distribution target. The 5% dividend increase reflects management's confidence in Shell's long-term cash flow durability; $3 billion in quarterly buybacks continues the 18-quarter streak of $3+ billion buybacks, with extra cash held on the balance sheet to enable larger buybacks in the future when market mispricing creates opportunity. Price lags from term contract pricing mean Q1 high prices will positively impact Integrated Gas results in Q2, partially offsetting near-term Qatari volume losses.
Q: What changed to make you enter Alaska's onshore lease auction, after previously avoiding new frontier exploration? What is driving the increase in leases that impacted Q1 net debt?
A: The Alaska acreage is not frontier exploration: it is a well-proven producing basin, and Shell is a non-operated partner with Repsol, which has deep existing Alaskan experience, so it carries low risk for Shell. The Q1 increase in lease balances was driven by an accounting requirement under IFRS 16 for a variable Baltic shipping lease, which requires marking the entire future lease to current spot rates. This is an accounting artifact, not an underlying operational or cash flow change, and only increased gearing by 1%.
Q: What is the outlook for selling Shell's U.S. chemicals business? Have improved market conditions increased buyer interest?
A: Improved operational reliability and higher ethane cracker margins (as a low-cost U.S. based asset) have made the business more attractive to potential counterparties. Management is actively progressing either a sale or capital markets transaction, but will only move forward if it delivers long-term shareholder value, and is building optionality to pursue the best outcome.
Q: What long-term changes to the LNG market do you expect from the current Middle East crisis?
A: Short-term market tightness is real due to disrupted volumes, but LNG only represents 3% of the overall global gas market, so the impact is contained. Long-term, management maintains strong conviction in LNG demand growth, with 600-800 million tonnes of annual demand expected by 2050. Energy security has become a top national priority for most countries, and LNG's versatility and ability to diversify supply sources will support sustained long-term demand. Diversified LNG portfolios like Shell's (supplied from 10+ countries, sold to 30+ countries) will earn a premium in this market.