The Week Ahead: After Shell's profits gusher, all eyes turn to BP

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The Independent Online

It is going to be a bumper week for company reporting with no fewer than 12 FTSE 100 stocks announcing either full year or quarterly figures.

After Shell broke the UK record for corporate profits last week, all eyes will be on rival BP tomorrow as it reports full year figures. The country's largest company certainly has a lot to live up to after Shell reported profits for 2005 in excess of $23bn, but with oil having traded at nearly $70 a barrel for the last couple of months BP should be confident of at least matching the market's expectations.

Consensus forecasts expect BP to make a profit of $5.6bn for the last quarter, giving it a total of $21.7bn for the year, slightly less than Shell. The analyst Richard Griffith at broker Williams de Broë says BP's valuation is still "compelling" and that there is a possibility that the company will announce another dividend increase. Last year the final dividend was raised by 26 per cent, and if that is matched this year the company will have returned $20bn to shareholders in the last 12 months.

However, 2005 was not all plain sailing for BP. The company has had to make a $700m provision for compensation to victims of the Texas City explosion in March, and the investigation into that blast is still going on. Some analysts fear that the litigious nature of the US could mean a civil suit and a much higher eventual cost for BP.

The weather was not kind to BP in 2005 with the company's Gulf of Mexico operations severely impacted by hurricanes Katrina and Rita. The Texas City refinery was shut down ahead of Rita and is only just coming back into full operational capacity. Mr Griffith estimates that the shutdown of the Texas City refinery throughout the most of the fourth quarter has cost the company $400m in lost profits, and there will also be a $400m charge for restructuring the European refining and marketing business.

The company, which is holding its annual meeting tomorrow, is also expected to update the market on its exploration and production pipeline as well as the current rate of reserves replacement.

TODAY: Results: Full year - Autonomy Corporation. First half - Albemarle & Bond. First quarter - Cambridge Antibody.

TOMORROW: Yell Group has had a difficult couple of weeks after the Competition Commission announced its preliminary findings in its investigation into the UK listings market. The company has until the summer to persuade the commission that the re-entry of BT and the rise of internet search facilities do in fact mean that the directories market is very competitive. Goldman Sachs expects Yell to report pre-tax earnings of £324m for the first nine months of last year, on revenues of £1.1bn. The broker is also looking for an update on Yell's US businesses.

Amvescap, the world's largest quoted hedge fund manager, is expected to report that it has about £385bn of funds under management. However, that figure is expected to remain flat and some analysts are expecting the company to announce more redundancies.

Results: Full year - Amvescap; BP; Dobbies Garden Centres; Quantica; XP Power. First half - Netcall; Dicom Group; PZ Cussons; Regent Inns. Third quarter - Danka Business Systems; Yell Group.

WEDNESDAY: The GlaxoSmithKline story has been short on excitement over the last 12 months and analysts expect more of the same as it reports full year numbers. A broad range of new drugs are approaching the end of phase II trials but most remain some way from the market. The Williams de Broë analyst Peter Cartwright believes current earnings mean that the market undervalues the pipeline. He is looking for pre-tax profits of £1.4bn.

The German utility E.On decided against pursuing a bid for Scottish Power in November, but analysts and rivals will take interest in the company's third quarter numbers as many believe that another bid will come soon. Analysts are looking for pre-tax profits for the first nine months of 2005 of about £410m.

Results: Full year - Alphameric; GlaxoSmithKline; Reckitt Benckiser; SThree. First half - Alumsac. First quarter - BOC. Third quarter - Scottish Power.

THURSDAY: Shares in the aircraft engine manufacturer Rolls-Royce had a great year in 2005, rising the best part of 80 per cent, leaving the company under pressure to deliver top-drawer results. The stock was heavily traded last week on the London options market, with a surge in demand for call options, indicating that traders are betting that either results will beat forecasts or that there will be a bid for the business. Analysts are looking for full year pre-tax profits of £580m, a rise of 59 per cent on 2004.

Results: Full year - BG Group; ICI; Rolls Royce; Smith & Nephew; Unilever. First half - Avingtrans;

Friday: Results: None expected.

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