Of the UK’s two large integrated oil companies, BP (BP.) looks to be the winner over Royal Dutch Shell (RDSB) in terms of fourth quarter and full year results.

Shares in both companies fell on the day of their results earlier this month but BP’s performance both in share price terms and operationally was the more impressive, with a modest fall in its shares on 6 February coming amid a much wider market decline.

Expectations for both sets of results were high after a significant recovery in the oil price. Shell’s largely in-line numbers were not enough to match these expectations. Current cost of supply earnings (Shell’s preferred measure of profit) excluding one-off items came in at $15.76bn compared with $7.19bn a year earlier.

However, this was only marginally ahead of the analyst consensus figure of $15.72bn. In part this was due to a weaker than expected performance from its downstream (refining and marketing) operations. This pattern was repeated in the quarterly results from US rivals ExxonMobil and Chevron.

BP posted underlying replacement cost profit of $2.1bn against consensus estimates for $1.9bn, quadrupling year-on-year, and, in contrast, delivered ‘very strong’ downstream earnings.

Both companies achieved a robust cash flow performance which is encouraging for the sustainability of their respective dividends. At £23.60, Shell is yielding 5.7%; and at 478p, BP is yielding 6%. (TS)

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