Shell Smashes Q2 Earnings Forecasts—Even as Profits Tumble Year-Over-Year

Big Oil's resilience playbook strikes again.

Shell just pulled off a Wall Street sleight-of-hand—beating analyst expectations despite shrinking profits. The energy giant's Q2 report reveals the brutal math of 2025's energy markets: doing 'better than feared' now counts as a win.

The irony? Shell's stock will probably rally on this 'less bad' news—because modern markets reward lowered expectations more than actual growth. Another masterclass in expectation arbitrage from an industry that wrote the playbook.

Shell keeps investors happy despite falling profits

Shell also said its shares ROSE 2.5% in early trading Thursday in London after the numbers came in. CEO Wael Sawan spoke on CNBC’s Squawk Box Europe after the results went public, saying:

“The backdrop of the macro has been challenging, and what I WOULD say is we continue on the momentum that we have in transforming Shell. On all measures, [I’m] pleased with that performance. And on the trading side, indeed, despite difficult macro, pleased with how the team has performed.”

Sawan’s comments come as the company faces weaker global oil and gas prices and declining returns in key segments. Still, Shell’s performance outpaced its rivals.

According to the company’s March update, it had laid out a plan to focus more on shareholder returns, increase cost savings, and double down on liquified natural gas.

That appears to have worked in its favor. So far this year, Shell’s stock has climbed 8%, beating BP’s 3% gain and Exxon Mobil’s 4%, while TotalEnergies in France has dropped 2% in the same period.

Shell said it’s not interested in buying out its struggling domestic rival BP. At the end of June, the company publicly dismissed any takeover speculation, stating it had “no intention” of making an offer. Speaking on the M&A industry, Sawan said: “I don’t buy bigger is better. I think you have to drive it from a value perspective.”

LNG strategy, cost cuts, and no U.S. listing

Shell has made liquified natural gas central to its long-term strategy. It’s currently the world’s largest trader of LNG and doesn’t see the need for acquisitions to strengthen that lead. At the same time, it’s been cutting costs aggressively.

Shell confirmed Thursday it had achieved $800 million in structural cost reductions in the first six months of 2025, bringing total cuts since 2022 to $3.9 billion. The company previously said it’s targeting $5 billion to $7 billion in cost cuts by the end of 2028.

Meanwhile, Shell’s net debt has gone up. It ended Q2 with $43.2 billion in debt, compared to $41.5 billion at the end of the previous quarter.

When asked again about the idea of moving Shell’s listing from London to New York, Sawan shut it down. “It is not a live discussion,” he said. “Part of the reason is actually we have been outperforming. We have been able to just stick to our own story, just deliver on what we say we’re going to do.”

Referencing Shell’s 2025 Capital Markets Day, Sawan reminded investors that the company had reused its former tagline: “You can be sure of Shell.” He said that choice reflected confidence in the company’s direction and how it’s being received.

“On the back of that, we feel more and more confident that our message is getting through to those pools of capital that want to invest in this differentiated investment thesis that we have,” Sawan said.

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