Shell shares rose more than 3% in early trading in London and Amsterdam on Thursday, October 29, after the energy company reported a sharp increase in third-quarter adjusted earnings and announced a new $5 billion stock repurchase program.
For the three months ended September 30, Shell said adjusted earnings climbed to $10.81 billion, compared with $5.43 billion a year earlier. Revenue increased to $92.85 billion from $68.15 billion over the same comparison.
Refining margins and commodity prices lift results
Shell attributed the earnings increase mainly to stronger refining margins and higher commodity prices. The figures are adjusted results, rather than a reported GAAP net-income figure, and cover the company’s third quarter through September 30.
The market reaction came alongside Shell’s capital-return announcement. The board authorized a three-month repurchase plan covering shares traded in both London and Amsterdam. Shell said $3 billion of stock would be bought in London and the remaining $2 billion in Amsterdam.
| Capital-return measure | Amount or payment |
|---|---|
| Share repurchases | $5 billion over three months |
| London repurchases | $3 billion |
| Amsterdam repurchases | $2 billion |
| Interim dividend | $0.3906 per share |
| American depositary share dividend | $0.7812 |
Repurchased shares will be canceled, according to the company’s financial report. The split between the two exchanges gives Shell a defined allocation for the new program, while the cancelation of acquired shares reduces the number of shares remaining after the purchases are completed.
Dividend also increases
Shell’s board raised the interim dividend to $0.3906 per share from $0.3580 previously paid. It also declared a dividend of $0.7812 per American depositary share.
The higher dividend and buyback were announced as Shell reported a year-over-year increase in both adjusted earnings and revenue. The share move was reported in early trading in London and Amsterdam, where the company’s shares are listed under SHEL.L and SHELL.AS, respectively.
- Third-quarter adjusted earnings: $10.81 billion, up from $5.43 billion a year earlier.
- Third-quarter revenue: $92.85 billion, up from $68.15 billion.
- New repurchase plan: $5 billion, with shares to be canceled.
