Shell Adjusted Profit Hits $10.814 Billion, Beats Expectations With $5 Billion Buyback
Key Facts
Shell said on October 29 that adjusted profit reached $10.814 billion in the third quarter of 2026, beating analysts’ average estimate of $10.33 billion, according to Reuters. Profit rose from $9.836 billion in the second quarter and nearly doubled from $5.432 billion in the third quarter of last year. The company attributed the improvement to higher refining margins and strong operational performance in what it described as a volatile environment with high commodity prices. Chief Executive Wael Sawan said the company generated $21.0 billion in cash flow from operations despite supply disruptions in the Middle East. Shell also announced a new $5 billion share buyback programme.
Income attributable to Shell shareholders was about $12.057 billion in the third quarter, compared with $10.821 billion in the second quarter and $5.322 billion a year earlier. Integrated Gas posted adjusted earnings of $3.037 billion, while Upstream earnings reached $3.189 billion. Chemicals and Products generated $3.855 billion, making it the largest of these segments by adjusted earnings reported for the quarter. The company said adjusted earnings rose clearly from the previous quarter, reflecting high refining margins and strong operational performance despite low water levels in the Rhine. The improvement thus extended across more than one business, although the segments’ contributions to the result varied.
Refining was one of the main drivers of the quarterly increase, with Shell’s indicative global refining margin rising to $42 per barrel in the third quarter, from $24 per barrel in the second quarter and $11.6 per barrel in the same period of 2025. Product margins increased by $1.065 billion from the previous quarter, driven mainly by higher refining margins. But the company said lower trading and optimisation partly offset that effect. Shell said commodity prices remained high and volatile, with disruptions in the Middle East coinciding with the results. Sawan said operating cash flow was $21.0 billion “despite Middle East disruptions,” while oil and gas production fell 17% in the first nine months of 2026 compared with the same period of 2025, mainly because the conflict affected Qatar’s volumes.
Cash flow from operations was $21.043 billion in the third quarter, compared with $21.432 billion in the second quarter, while free cash flow fell to $16.322 billion from $17.524 billion. Net debt, meanwhile, declined to $39.7 billion at the end of the quarter, from $41.8 billion at the end of the second quarter. Gearing, which measures debt against capital, fell to 16.6% from 18.7%. Shareholder distributions during the quarter totalled $5.3 billion, including $3.2 billion in share buybacks and $2.2 billion in cash dividends. The company declared a quarterly dividend of $0.3906 per share.
The new buyback programme, announced by Shell on October 29, targets $5 billion of spending over about three months to reduce issued share capital, with all repurchased shares to be cancelled. The company said it aims to complete the programme before announcing fourth-quarter results, subject to market conditions. It expects cash capital expenditure of between $23 billion and $25 billion in 2026, including the ARC acquisition. As part of expanding its Integrated Gas business, Sawan said the company had completed the ARC acquisition and taken the final investment decision on the second phase of the LNG Canada project. Shell expects fourth-quarter Integrated Gas production of between 1,080 and 1,180 thousand barrels of oil equivalent per day, and liquefaction volumes of between 7.3 million and 7.9 million tonnes of liquefied natural gas.
Shell shares rose 3.2% in early trading on the day results were announced, according to Reuters via MarketScreener, with the report noting that higher earnings and record refining margins helped the company beat expectations. The company set February 4, 2027, for its capital markets update and the announcement of fourth-quarter 2026 results and distributions. It also said first-quarter 2027 results and distributions would be released on April 29, 2027. These dates follow the company’s fourth-quarter operating outlook, while the buyback programme remains subject to market conditions. Fourth-quarter results will be the next announced milestone for assessing the company’s performance after supply disruptions and the sharp rise in refining margins.