Royal Dutch Shell issues profit warning

The oil titan is off over 2% after warning of a substantial drop in its anticipated profits.

In 2012 the firm made a profit of $27.2 billion, and now it expects full-year profits in 2013 to be just $16.8 billion. This large reduction prompted traders to sell the stock.

Over the past 12 months, the stock’s price has been stuck within the 2300p and 2140p range. 2013 wasn’t the greatest year for Royal Dutch Shell: the company sold off US assets in the shale gas industry, and it has plans to dispose of North Sea investments.

Shell’s CEO Ben van Beurden stated that the focus is now on ‘capital efficiency and on continuing to strengthen our operational performance’. The asset-stripping programme is a sign the firm is focusing on its more profitable units.

The company will release its fourth-quarter and final-year results on 30 January. Meantime, today’s decline in share price could provide a buying opportunity.

Royal Dutch Shell chart

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