Shell Plc. (Shell (SHEL)) shares rose in premarket trading Thursday after the energy company announced a new $3 billion share buyback program, even as it reported mixed second-quarter fiscal 2026 results.
Adjusted earnings came in at $3.52 per American depositary share, crushing the analyst consensus estimate of $1.58. Revenue totaled $94.66 billion, missing the Street estimate of $108.24 billion. Adjusted earnings jumped to $9.8 billion from $6.9 billion in the first quarter, driven by higher realized commodity prices, stronger liquefied natural gas and oil trading, favorable tax impacts, and improved chemicals margins.
Cash flow from operations was $21.4 billion during the quarter. Net debt declined to $41.8 billion at the end of the quarter from $52.6 billion in the first quarter.
Integrated Gas, Upstream Production Decline
Integrated Gas production fell 31% from the previous quarter to 631,000 barrels of oil equivalent per day, reflecting the impact of the Middle East conflict on Qatari volumes. LNG liquefaction volumes declined 2% sequentially to 7.73 million metric tons due to the conflict and higher planned maintenance.
Realized liquids prices increased to $80 per barrel from $77 in the prior quarter, while realized gas prices rose to $7.20 from $6.50 per thousand standard cubic feet.
Upstream production edged down to 1.824 million barrels of oil equivalent per day from 1.843 million in the first quarter, primarily because of higher maintenance activity.
Marketing sales volumes declined to 2.57 million barrels per day from 2.63 million barrels per day in the prior quarter. Mobility sales fell to 1.867 million barrels per day from 1.915 million, while lubricants sales declined to 75,000 barrels per day from 95,000.
Buyback Program Resumes
Shell returned $5.2 billion to shareholders during the quarter, including $3 billion in share repurchases and $2.2 billion in cash dividends.
The company had suspended its previously announced $3 billion share buyback program after agreeing to acquire ARC Resources Ltd., completing $1.8 billion of that authorization before the pause.
Shell launched a new $3 billion share buyback program and said the remaining $1.232 billion from the suspended program also will be completed. The combined repurchases are expected to continue through Oct. 23, 2026.
ARC Acquisition, Outlook
Earlier this year, Shell agreed to acquire ARC Resources Ltd., a Montney-focused producer in British Columbia and Alberta, in a cash-and-stock deal.
The acquisition is expected to add about 370,000 barrels of oil equivalent per day and increase Shell's production growth rate to 4% through 2030, compared with 2025 levels. It also expands the company's position in Canada's Montney basin.
For the third quarter, Shell expects Integrated Gas production of 570,000 to 630,000 barrels of oil equivalent per day and LNG liquefaction volumes of 7.1 million to 7.7 million metric tons, excluding volumes from ARC Resources and Qatar.
The company expects upstream production of 1.68 million to 1.88 million barrels of oil equivalent per day, reflecting higher planned maintenance.
Shell forecast marketing sales volumes of 2.55 million to 2.75 million barrels per day, refinery utilization of 93% to 101%, and chemicals manufacturing utilization of 78% to 86%.
For the full year, the company expects cash capital expenditures of $24 billion to $26 billion.
SHEL Price Action: Shell shares were up 2.28% at $90.35 during premarket trading on Thursday, according to market data.
