Shell profit beats estimates, announces $3.5B share buyback

Shell (SHEL) reported adjusted fourth-quarter net income of $7.3 billion, topping analyst estimates of $6.1 billion. The oil giant also announced a $3.5 billion share buyback program and that it would raise its dividend by 4%.

Yahoo Finance's Madison Mills breaks down the announcement.

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Editor's note: This article was written by Stephanie Mikulich

Video transcript

SEANA SMITH: All right. Time for a stock to watch. Shell keeping up the pace of its buybacks, announcing another $3.5 billion share buyback here. Also, raising its dividend. And this, of course, coming on the day that the company reports quarterly results. We want to head to "Yahoo Finance's" Madison Mills on the floor of the New York Stock Exchange with the movement to the upside that we're seeing here, Maddie.

MADISON MILLS: Yeah. Shell reporting $28 billion of revenue. But that beat was not enough. Even though it was a beat on estimates, it was a 30% drop from their profits from the prior year, which was over $39 billion. So well, it's interesting to me about this stock is that it continues to follow this trend that we've been seeing, where when you've had these incredible growth years, think about an NVIDIA, think about Apple a couple of years ago, it's hard to continue that growth moving forward.

But having said that, the CEO said, look, we still had a good year. And we're expecting to have more growth ahead. But we know we got to do more to keep that growth up. A positive indication here exactly, like, you mentioned, Seana, increasing their share buyback program to the tune of $3.5 billion. They had enough cash on hand to increase dividends by about 4%.

So if you're looking for a little bit of diversity in your portfolio, looking to get in on a name that's going to have a dividend play for you, that could be a boon in your mix of stocks. Also, if you're looking for a play that could be a little bit inflation proof, if you're worried about inflation bumping back up, sometimes getting in on energy is a good way to diversify your portfolio around that potential concern.

Also, Shell really upping the bar for Chevron and Exxon. Those earnings are going to be coming out tomorrow. So interesting to see whether or not those names are able to stick to the positive picture that Shell was able to paint in their earnings.

That stock is up a little over 2% in the futures this morning.