The Scotsman: BP and Shell share in bumper profits: “OIL majors BP and Shell, the former thriving and the latter struggling in terms of market perceptions recently…”: “In a results announcement that analysts say is likely to be a sideshow to the group’s reserves crisis and its corporate governance review in November, Shell will say it benefited from well-performing downstream operations and higher oil prices.” (ShellNews.net)
25 Oct 04
OIL majors BP and Shell, the former thriving and the latter struggling in terms of market perceptions recently, are likely to at least share in bumper profits statements for their third trading quarter this week.
BP is expected to report third quarterly net income of between $3.81 billion and $4.54bn (£2.09bn and £2.49bn) compared with $2.8bn (£1.5bn) the year before, on Tuesday.
Quarterly earnings will have benefited from a 46 per cent improvement in oil prices, although production excluding BP’s Russian oil venture TNK-BP is set to be 4 or 5 per cent lower than the second quarter due to hurricanes and planned shutdowns.
On Thursday, Shell is expected to turn in net income of $4.3bn (£2.35bn) against $2.9bn (£1.6bn) last time.
In a results announcement that analysts say is likely to be a sideshow to the group’s reserves crisis and its corporate governance review in November, Shell will say it benefited from well-performing downstream operations and higher oil prices.
However, it is expected to say it has lost output following Hurricane Ivan, maintenance in the North Sea and disposals.
Drugs major GlaxoSmithKline reported tumbling profits in its second trading quarter last July amid cut-price generic competition and a weak dollar.
GSK is expected to reveal that the trend has continued when it posts Q3 profits on Thursday - with a City consensus of a pre-tax profit of £1.5bn against £1.7bn in the same period last year.
Also on Thursday, leisure group Whitbread, is expected to post pre-tax profits of £144 million against £134m last time. New chief executive Alan Parker is due to unveil a restructuring plan to improve the operating returns at its UK Marriott four-star hotel business.
However, stockbroker Gerrard says the scope of the shake-up is unlikely to be as radical, or the benefit to shareholders as significant, as revealed by InterContinental Hotels.
A trading update from Whitbread in September said that a strong performance from its budget hotels had helped offset weakness in its pub restaurants during a summer of disappointing weather. Its David Lloyd Leisure subsidiary also saw slowing sales growth.
Poor weather has also been blamed by Unilever in successive trading statements for sluggish sales of ice cream and Lipton iced tea.
The company is due to reveal its third-quarter sales performance on Wednesday after shocking the market with a profits warning last month.
Margins in the period between July and September are expected to be lower than a year ago, while full-year earnings guidance has been reduced to low single-digits.
A Gerrard spokesman said: "At least now the market is expecting the worst, so if Unilever can deliver underlying sales growth from its leading brands above 1 per cent this will be taken positively."
Half-year figures from Boots, which has just confirmed it is considering sex toys as well as medicines and cosmetic products, are due on Thursday.
Analysts say they are likely to show a deterioration in returns on sales as the company continues to face rising competition from the supermarkets.
Following a disappointing trading update last month, when sales were hit by the impact of wet weather on seasonal products, analysts will be looking for reassurance about prospects in the run-up to the Christmas period.
The City range of forecasts for the group is for profits of between £190m and £210m, compared with £266.4m last time.