Shell misses Q4 profit expectations as crude prices drop

• Full-year 2025 adjusted earnings came in at $18.5 billion, below expectations, as European energy majors face pressure from lower oil prices
• Net debt increased to $45.7 billion with gearing at 20.7%, up from $41.2 billion and 18.8% in the previous quarter
• CEO Wael Sawan emphasized strong operational performance in integrated gas, upstream, and marketing businesses, while acknowledging tax adjustments and chemicals weakness hurt results

Shell Misses Q4 Profit Expectations Amid Falling Oil Prices

Key Financial Results:

Shell reported adjusted earnings of $3.26 billion for Q4 2024, missing analyst expectations of $3.53 billion and marking its weakest quarterly performance since Q1 2021 ($3.2 billion). Full-year 2025 adjusted earnings reached $18.5 billion, below expectations and down from the previous year.

Financial Position:

• Net debt increased to $45.7 billion (from $41.2 billion in Q3)
• Gearing ratio rose to 20.7% (from 18.8% in Q3)
• Dividend increased 4% to $0.372 per share

Performance Drivers:

CEO Wael Sawan attributed the weak results to tax adjustments, challenging chemicals sector performance, and lower crude oil prices, while highlighting operational strength in integrated gas, upstream, and marketing businesses.

Market Context:

European energy majors face difficult decisions this earnings season due to declining oil prices. Norway's Equinor has already announced significant capital expenditure cuts and workforce reductions, setting a precedent for the sector. The weaker pricing environment is testing companies' commitments to shareholder returns and capital allocation strategies.

Management Outlook:

Sawan emphasized Shell's focus on improving operational performance through AI deployment and supply chain optimization. The company aims to maintain consistent capital returns while improving return on capital employed.

Upcoming Events:

BP and TotalEnergies are scheduled to report Q4 earnings next week, providing further insight into sector-wide performance challenges.

The results underscore mounting pressure on European oil giants to balance shareholder returns with strategic investments amid deteriorating market conditions.