Shell Posts a Steep Drop in Earnings. Why Weak Oil Prices Aren’t Rattling Investors.

Oil major Shell said it would buy back $3.5 billion of shares. (Stefani Reynolds/AFP via Getty Images)

Shell stock was sliding Thursday after the oil major reported a drop in profit, but announced another share buyback plan.

The energy giant’s American depositary receipts edged 0.5% higher to $72.09 on Thursday morning. ADRs for rival BP slid 0.7%. The S&P 500 was up 0.8%, boosted by strong Big Tech results.

Shell’s adjusted earnings fell to $4.3 billion—a drop of nearly 25% from the first quarter—which it said reflected “lower trading contribution in a weaker margin environment.” Benchmark oil prices have remained soft this year, weighed down by worries about weak demand from China and a glut in supply.

The company also said it would buy back $3.5 billion of shares, in line with the program it launched in May, which probably helped investors to look past the fall in earnings.

Write to George Glover at george.glover@dowjones.com