Shell forecasts weaker Q4 2025 earnings in Marketing, Chemicals, and Renewables segments
Summary
Shell plc provided a Q4 2025 operational update, forecasting weaker adjusted earnings for its Marketing, Chemicals and Products, and Renewables segments, alongside significant cash outflows for taxes and emissions certificates.
Key Events
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Marketing Segment Outlook Weakens
Adjusted earnings for the Marketing segment are expected to be below Q4 2024, partly due to a non-cash deferred tax adjustment in a joint venture.
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Chemicals and Products Segment Below Break-Even
The Chemicals sub-segment anticipates a significant loss, and the overall Chemicals and Products segment adjusted earnings are projected to be below break-even for Q4 2025, with trading and optimisation significantly lower.
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Renewables and Energy Solutions Potential Loss
Adjusted earnings for the Renewables and Energy Solutions segment are expected to range from a loss of $0.2 billion to a gain of $0.2 billion, indicating potential unprofitability.
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Significant Cash Outflows Expected
The company forecasts approximately $1.5 billion in outflows for emissions certificates and $1.2 billion for German Mineral Oil Taxes, impacting Q4 2025 cash flow from operations.
Analysis
This pre-earnings update signals a challenging fourth quarter for Shell, with several key segments facing profitability headwinds. While some impacts are non-cash or related to timing of payments, the cumulative effect of lower expected earnings in Marketing, Chemicals, and Renewables, coupled with substantial cash outflows, suggests a weaker financial performance than previously anticipated. Investors should adjust their expectations for the upcoming Q4 2025 results, particularly regarding the profitability of its downstream and new energy businesses and the impact on cash flow.
At the time of this filing, SHEL was trading at $68.77 on NYSE in the Energy & Transportation sector, with a market capitalization of approximately $203.3B. The 52-week trading range was $58.55 to $77.47. This filing was assessed with negative market sentiment and an importance score of 8 out of 10.