Shell (Shel) on Thursday announced a new $3.5 billion (£2.80 billion) share buyback, alongside lower first quarter earnings which nonetheless beat market expectations.

Shares in oil major rose 1.2% to £28.51 in London.

In the first quarter, Shell said total revenue, which includes its share of joint ventures and associates, fell 16% to $74.70 billion from $89.02 billion a year prior.

Shell's pretax profit slipped 23% to $11.04 billion from $14.35 billion a year prior.

Adjusted earnings fell 20% to $7.73 billion from $9.65 billion a year prior, ahead of the $6.25 billion Bloomberg-cited consensus.

Basic earnings per share fell 9.5% to $1.14 from $1.26.

The dividend was increased 20% to $0.344 from $0.2875.

The buyback, pitched at the same level as the past two quarters, is expected to be completed by the second quarter 2024 results announcement.

Stuart Lamont, investment manager at RBC Brewin Dolphin, said: “Shell has beaten expectations by a reasonable margin, despite the impact of lower gas prices during the first quarter. Earnings are up, costs have fallen, and the oil and gas major has brought debt down too – all in all, it’s a solid set of numbers and underlines why the market, generally, remains bullish on Shell.

"Investors were looking for reassurance on volumes and capital discipline, as these ultimately feed through to cash returns. Today’s update has delivered on both fronts, with the addition of an extension to the share buyback programme.”

Key Morningstar Metrics for Shell Stock

• Fair Value Estimate: £29.00
• Morningstar Rating: 3 stars
• Morningstar Economic Moat Rating: None
• Morningstar Uncertainty Rating: High

Shell Sees Fall in Renewables Earnings

Chief executive Wael Sawan commented: "Shell delivered another quarter of strong operational and financial performance, demonstrating our continued focus on delivering more value with less emissions."

Integrated Gas earnings, which includes liquefied natural gas, fuels and other products, rose 15% to $2.76 billion from $2.41 billion a year ago.

But Upstream earnings, which includes exploration and extraction of crude oil, natural gas and natural gas liquids, declined 19% to $2.27 billion from $2.79 billion.

Marketing earnings, which includes the Mobility, Lubricants, and Sectors and Decarbonisation businesses, fell 37% to $774 million from $1.18 billion.

Chemicals & Products earnings, which includes chemicals manufacturing plants and refineries which turn crude oil and other feedstocks into a range of oil product, fell 34% to $1.15 billion from $1.75 billion.

There was also a sharp fall in Renewables & Energy Solutions earnings, slumping to $553 million from $2.21 billion a year ago.

For 2024, Shell forecast cash capital expenditure between $22 to $25 billion. It expects Integrated Gas production to be around 920 to 980 thousand barrels of oil equivalent per day. LNG liquefaction volumes are expected to be around 6.8 to 7.4 million tonnes.

Upstream production is expected to be around 1,630 to 1,830 thousand boe/d. Marketing sales volumes are expected to be approximately 2,700 to 3,200 thousand b/d.