Shell’s full-year profit soars to four-year high

Earnings rise 36% for the year, while cash flow was also strong.

Article updated: 31 January 2019 11:00am Author: Ian Forrest

  • Shell’s earnings boast an increase $5.7bn reflecting the rise in the prices of oil, gas and LNG.
  • Good news for investors to continue as its latest share buyback programme commences.
  • We continue with our ‘buy’ recommendation on the stock for investors seeking income and willing to accept a low to medium level of risk.

Royal Dutch Shell reported a 32% rise in Q4 earnings this morning to $5.7bn, better than expected and reflecting the rise in the prices of oil, gas and LNG over the previous year. That helped full-year earnings rise 36% to $21.4bn and cash flow was also strong in the final quarter, rising from $12.1bn to $22bn.

Even better news for investors was that the company launched the latest part of its $25bn share buyback programme launched last year, a move to purchase $2.5bn in stock.

The shares responded well to what is clearly good news and rose 4%. Having raised $30bn from the sale of assets over the year and seen cash flow rise 50%, the company is in better shape which enables it to continue with the share buyback scheme and maintain its healthy dividend payments.

While we maintain our ‘buy’ recommendation, it is worth noting that any material fall in oil prices could once again raise questions about the company's ability to maintain its dividend.


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Ian Forrest

Investment Research Analyst

Ian’s background in investments, financial journalism and research has seen him advising private investors on equities and helping to manage portfolios. His qualifications include the Certificate in Financial Planning and the Chartered Institute for Securities & Investment’s Investment Advice Diploma.