City braced for lower profits as BP and GSK try to put troubles behind them

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OIL giant BP and multinational drugs company GlaxoSmith-Kline are among the big hitters publishing results this week.

The City is braced for a 34 per cent fall in quarterly profits at BP, to around £2 billion, as figures for the final three months of the year will reflect the sale of its Russian joint venture.

The group is planning to
return to growth with a series of highly profitable new mega-projects going on stream. However, Keith Bowman, equity analyst at Hargreaves Lansdown, said the final remaining settlement with the US department of justice in relation to its Gulf of Mexico spill continues to overshadow investment prospects.

Lucozade and Ribena owner GlaxoSmithKline is expected to end a troubled year on a
more positive note when its reports full-year results on Wednesday.

Experts at UBS predict sales declines will ease in the final quarter of 2012, down 3 per cent on the previous year to £6.8bn. The group said at its last update that it hoped better performances in emerging markets, and Asia would see a return to sales growth in the fourth quarter.

The ongoing squeeze in
Europe means analysts are expecting full-year sales to be around 3.5 per cent lower at £26.4bn and are pencilling in an 11 per cent slump in profits to £7.6bn.