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Shell’s impressive first-quarter earnings and a massive $3.5 billion buyback have sent its stock soaring, as the energy giant continues to prioritize capital returns over large-scale acquisitions.
The company’s adjusted earnings rose an astonishing 52% in Q1, reaching $5.6 billion. This significant growth has been fueled by higher integrated gas production, solid upstream availability, and strategic portfolio reshaping. The impressive results have not only boosted investor confidence but also marked the 14th consecutive quarter where Shell has executed at least $3 billion in buybacks.
In an effort to reassure investors, CEO Wael Sawan emphasized that purchasing its own shares remains “absolutely the right alternative” compared to large-scale acquisitions. This approach is a stark contrast to British Petroleum’s (BP) recent decision to scale back its buyback program due to concerns over its balance sheet.
Shell’s commitment to capital returns has led to an unprecedented 20% of its outstanding shares disappearing over time, as the company continues to prioritize rewarding shareholders over making large-scale investments. This strategy is not without its challenges, however, as the energy giant struggles with low margins in its chemicals division and ongoing issues related to liquefaction volumes in integrated gas.
Despite these headwinds, Shell remains committed to advancing its energy transition plans while maintaining a strong balance sheet. As investors look ahead to the second half of 2025, they will be keeping a close eye on whether operational hiccups and debt increases become bigger risks for the company.
Source: https://coincentral.com/shell-shel-stock-strong-q125-earnings-and-3-5-billion-buyback-boost-confidence/
