AMSTERDAM (AP) — Royal Dutch Shell PLC issued a profit warning for the fourth quarter on Friday, saying results will be worse than most analysts expected due to a mix of lower production, higher costs, and a worse performance by its refining division.
The company gave a provisional net profit figure of $1.8 billion (1.32 billion euros) for the quarter, down from $6.7 billion in the same period of 2012. Full earning figures are not due until Jan. 30.
Shares, which have underperformed most other major oil companies in the past year, fell more than 3 percent in early trading in Amsterdam, but later recovered somewhat and were down just 1.4 percent at 25.99 euros.
"Shell has broken with its recent custom of disappointing on earnings day," said Investec analyst Neill Morton in a note. "It is now dishing up the bad news ahead of time."
Chief executive Ben van Beurden said in a statement the results were "not what I expect from Shell."
Van Beurden, a Dutchman, took over the top job from Peter Voser, who is retiring, just two weeks ago. Morton, the analyst, said that bullish investors may think that the profit warning so soon after Van Beurden assumed office is a move to clear the decks of bad news or build support for a new round of cost-cutting, both of which will make the company look better later in his tenure.
"We remain to be convinced," Morton said. He has a "hold" rating on shares.
The company did not release many figures Friday, but it did offer up one number commonly used by analysts to gauge performance: income not including one-time charges and measured on a "current cost of supplies" basis, which also strips out fluctuations in the price of oil in the pipeline. On that measure, earnings would have been $2.9 billion, Shell said, versus $5.6 billion in the same period a year ago.