Shell profit halves
|
|
February 7, 2002: 7:47 a.m. ET
Europe's No. 2 oil company posts drop in Q4 profit, as crude prices tumble
|
LONDON (CNN) - Royal Dutch/Shell, Europe's largest oil company, said on Thursday fourth-quarter profit was almost halved as crude prices slid.
Fourth-quarter net income, excluding one-time items, came in at $1.909 billion, down from $3.579 billion a year ago. Analysts polled by Reuters had expected earnings in the range of $1.9 billion to $2.3 billion.
Shell is not alone in reporting slumping profits, last month TotalFinaElf, the world's fourth-largest publicly traded oil company, blamed the decline in energy prices for a 34-percent drop in the last three months of last year.
Brent crude prices took a tumble after September 11 amid concerns of global recession. While demand has slowed, crude prices have averaged about $19.40 a barrel in the last three months of 2001, compared with $29.65 a year earlier.
Shares in Shell Transport & Trading (SHEL), which owns 40 percent of Royal Dutch/Shell Group, fell 2.7 percent to 471 pence after the announcement. Royal Dutch, which owns the rest of the oil giant, lost 2 percent to 56.10 in Amsterdam.
Both Shell and Royal Dutch shares have underperformed the world's No. 1 publicly trade oil company, Exxon Mobil, and smaller British rival BP by 9 percent over the past 12 months, according to Reuters, largely because the group has had to rein in output growth expectations.
Shell, the world's second-largest oil company, has cut its forecast for oil and gas production growth as supplies in the UK and U.S. decline. The Anglo-Dutch giant expects growth to average 3 percent a year up to 2005, from 5 percent previously.
Production figures for the quarter showed down oil output by 1 percent on a year ago.
Investors are placing increasing emphasis on growth in production, as recent industry-wide efforts to cut costs and falling crude prices have narrowed the scope for further profit increases from these sources.
|
|
|
|
|
|