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Shell’s quarterly adjusted earnings up 18%

Feb. 2, 2012, 2:39 a.m. EST

By Alexis Flynn

LONDON (MarketWatch) — Royal Dutch Shell PLC Thursday posted an 18% rise in adjusted profit for the fourth quarter, but Europe’s largest company by market capitalization still missed analyst expectations, as poor refining margins and lower natural gas demand crimped some of the benefits of higher crude prices.

“Our fourth quarter results were impacted by a sharp downturn in industry refining margins and North American natural gas prices,” said Chief Executive Peter Voser, adding that “the global economy and energy markets are likely to see continued high volatility.”

The Anglo-Dutch energy company said the clean current cost of supplies, a keenly-watched figure that strips out gains or losses from inventories and other non-operating items, was $4.85 billion in the three months ended Dec. 31, compared with $4.11 billion in the fourth quarter of 2010. This was below expectations of $5.16 billion in a Dow Jones Newswires poll of fifteen analysts.

Total oil and gas production was 3.305 million barrels of oil equivalent per day, a decline of 5% on the year as asset sales and the temporary shutdown of one of its biggest Nigerian fields affected output. Analysts were expecting production to decline 6.4%.

Net profit for the quarter totaled $6.50 billion, down 4% from $6.79 billion a year ago.

Group revenues were $119.13 billion, compared with $105.53 billion in the fourth quarter of 2010.

Diluted earnings per share were 1.04 compared with $1.10 the previous year.

Shell B shares closed at 2,326 pence Wednesday. The stock rose 11% in 2011 despite volatile equity markets, buoyed by continued high oil prices and its improved financial performance.

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