BP and Shell results set to benefit from higher oil prices

Shell and BP are expected to have seen fourth-quarter 2009 profits benefit from the higher average oil price than a year earlier during the recession.

Their upstream production businesses should have performed much more strongly than their downstream – refining – where weak demand has hammered profit margins.

BP is now edging ahead of its rival after years of under-performance as chief executive Tony Hayward strips out costs and improves the group's refining performance.

BP's profits for the fourth quarter are set to jump more than 80 per cent to $4.7 billion (2.9bn) tomorrow. This contrasts with a 40 per cent fall for Shell to $2.9bn expected on Thursday. Annual profits for both firms will be well below 2008, when record oil prices inflated earnings.

BP's full year surplus should come in at about $17bn – 20 per cent down on 2008 – although Shell could see a near-60 per cent slump to $13.4bn.

Still with energy, the oil and gas firm BG is expected to report a 5 per cent fall in operating profits to 1.06bn for the fourth quarter, although the City will concentrate on news from its range of interests in the Santos Basin off the coast of Brazil. Annual profits should be 23 per cent below last year at 4.1bn.

British Airways reports third quarter figures on Friday as it struggles against further falls in passenger numbers and fresh threats of union action.

While BA was able to halt the Christmas strike, union Unite has kept up the pressure and is organising a vote for action over jobs, pay and working conditions for 1 March.

The group is meanwhile yet to stem the decline in passenger numbers, although it has seen signs of improvement in the hard-hit long-haul market.

BA reported a first half-year loss of 292 million for the six months to end-September after revenues slumped 14 per cent in what is normally a buoyant period for the airline as it includes the holiday season. It will post a further loss in the third quarter of up to 151m, analysts said.

Full-year figures from GSK on Thursday are expected to show a return to annual profits growth after a boost from swine flu related sales.

Following an 11 per cent profits plunge in its last financial year, GSK is seen as confirming a far better performance thanks to the H1N1 flu vaccine and anti-viral Relenza sales, as well as a bigger contribution from its consumer healthcare arm.

Analysts are expecting GSK to report a 12 per cent hike in 2009 profits to 8.69bn.

The group recently said it was expecting an 835m sales boost in the final three months of its financial year thanks to sales of swine flu vaccinations.

First quarter figures on Friday from the world's biggest catering company will be watched for signs of improvement following a sharp fall in sales. Compass reported a 6 per cent decline in the final three months of its financial year as its key markets – business and industry and sports and leisure – took a knock from a slump in corporate hospitality spend.

The group has already braced the market for organic sales to remain "broadly flat" in the current financial year.

However, Compass has so far not let the sales pressure impact profits, reporting a 37 per cent leap in pre-tax profits to 773m for the year to end-September.

Unilever – which makes Lynx deodorant and PG Tips tea bags – had a boost from greater advertising spend, and releases its annual figures on Thursday.

The group said third-quarter sales rose 3.4 per cent in the three months to end-September after upping its advertising and launching products such as a new range of Lipton teas and Surf detergent in the UK.