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Los Angeles Times: Shell's Net Income Slips 4%

From Bloomberg News
Royal Dutch Shell, the world's third-biggest oil company, said Thursday that profit in the fourth quarter fell 4% as hurricane damage left it unable to take advantage of near-record crude oil prices.
Net income declined to $4.4 billion, or 66 cents a share, from $4.6 billion, or 68 cents, in the year-earlier period, The Hague-based company said in a statement. Shell said it would buy back about $5 billion of its shares this year, half the level expected by some analysts.
Shell, whose output growth has lagged behind competitors', is the first major oil company to report a drop in earnings as oil trades near records. Exxon Mobil posted the biggest quarterly and annual profit in U.S. corporate history.
Shell Chief Executive Jeroen van der Veer plans to spend $19 billion this year compared with more than $15 billion in 2005 to boost reserves.
“Production growth is not going to be anything spectacular over the next couple of years,” said Albert Thomson, who helps manage $6.5 billion, including Shell shares, at Aberdeen Asset Management in London. “For world-class output growth, investors need to focus on 2008 and afterward.”
Profit, excluding changes in inventory values, gained 3% to $5.4 billion, in line with the median forecast from nine analysts surveyed by Bloomberg News.
Full-year profit was $25.3 billion, a record for Shell. Revenue in the fourth quarter, excluding sales taxes and excise duties, slipped 1% to $75.5 billion.
Oil prices peaked at $70.85 a barrel in New York intraday trading Aug. 30, a day after Hurricane Katrina struck the U.S. Rita swept through almost four weeks later, and production has yet to return to normal.
Production in the fourth quarter fell 8.9% to 3.5 million barrels of oil equivalent a day, compared with 3.8 million a year earlier, Shell said.

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