THE City fears tomorrow could be D-Day for oil giant Shell when it unveils fourth-quarter and full year results.
Fourth-quarter earnings are expected to be down by almost a third after a previously announced write-off totalling Pounds 1 billion.
Analysts say this will offset any benefit from higher oil and natural gas prices. Net income in that quarter is expected to have been between $2.73 billion (Pounds 1.49 billion) and $3.35 billion against $2.78 billion the same time last year.
The results will be followed by a series of presentations for investors and brokers. Analysts warn that these could be used by institutional investors to get rid of chairman Sir Philip Watts, who has come under intense pressure to resign following last month’s 20% write-down in oil reserves.
Broker Tony Alves at Investec said: “The numbers will be less important than what Watts has to say for himself.”
Despite strength in the price of oil, Shell has dropped from a peak of 4251/4p since last June and today slid 11/2p to 3633/4p.
Share prices generally traded in a narrow band.
Dealers say insurers continue to sell and that is keeping buyers on the sidelines. The FTSE 100 index gained 10.8 points 4401.4 despite Wall Street opening lower this afternoon.
British Energy continued-to make headway, adding 2.20p at 10.11p on turnover of more than 140 million shares, although the company says it knows of no reason for this.
The cash-strapped power generator said it had settled a longstanding dispute with Germany’s Siemens which will result in a payment of Pounds 18.3 million.
It emerged on Friday that US hedge fund Appaloosa Investment Management bought a near-5% stake.
There was heavy turnover in ITV, down 61/4p at 141p, as several large lines went through on the ticker. They included 10.47 million and 3.95 million, both at 1471/4p.
BOC rallied 9p to 880p following yesterday’s sell-off, which accompanied better-than-expected firstquarter numbers.
Brokers remain divided about prospects for the industrial gases group. Some are worried about heavy US litigation where welders are claiming they contracted Parkinson’s disease from the fumes emitted by welding rods. US investment bank JP Morgan has upgraded from neutral to overweight.
It points to a yield of almost 5% and says that worries over the legal claim have been overdone.
The shares continue to trade at a discount to the rest of the sector.
Builders’ merchant Wolseley came off a five-year high with a fall of 51/2p to 7841/2p. Broker UBS remains a fan, repeating its buy recommendation and raising its 12-month target by 23p to 923p.
It was the first day of dealing on AIM in Supercart which sells, markets and distributes a range of all-plastic supermarket trolleys, following a placing of eight million shares at 50p. The shares opened at 541/2p before settling at 533/4p. The Pounds 4 million raised will go towards expanding the business.
The champagne corks must have been popping at IT recruitment specialist Spring, as the shares raced up 121/2p to 129p.
The group has been awarded a three-year, Pounds 100 million contract by one of the High Street players to provide a managed recruitment service for its IT staffing requirements.
Surfcontrol rose 22p to 562p. UBS has raised the shares from neutral to buy with a 700p target.
