BP still feeling pain from Gulf fallout as production suffers

BP, still affected by the production fallout from the Gulf of Mexico oil disaster, is expected to reveal an 11 per cent drop in profits tomorrow.

BP’s profits are forecast to be in the region of $4.9 billion (£3.1bn), 8 per cent down on the previous quarter. Production for the period is likely to be down 12 per cent year-on-year, analysts at JP Morgan Cazenove say, to just over three million barrels of oil a day. BP was producing four million barrels before the disaster.

The oil major’s pledge to sell $30bn of assets, which has included sites in the US, Egypt, Venezuela, Vietnam and Colombia, plus the suspension of Gulf of Mexico drilling, has also hit production.

More details will also be sought by the City about the recent announcement that the group secured government approval for a £4.5bn oil project, in the Clair field, west of Shetland. BP is expected set to pay a dividend of eight cents, up from seven cents last year.

Rival Shell is expected to benefit from new exploration projects and rising gas prices when it reports its Q3 results on Thursday, which are expected to be better than BP’s.

Swiss investment bank UBS will disclose the impact of unauthorised trading on third-quarter results tomorrow, although the bank has said it still expects a profit despite the $2.3bn allegedly lost by trader Kweku Adoboli. Adoboli, 31, was last month charged with committing false accounting and fraud during his time at the bank’s London offices. UBS Europe chief Sergio Ermotti has taken over as interim chief executive after Oswald Gruebel resigned over the incident.

Carpetright has a second‑quarter trading update tomorrow, when it is expected to repeat that it is being hit by people putting big‑ticket purchases like carpets on hold amid rising employment uncertainty and tight wallets.

The market expects low‑single growth in same‑floorspace sales at best. Q1 saw a recovery over the previous three months from a decline of 6 per cent to a fall of 0.2 per cent.

Third‑quarter results come on Wednesday from drugs giant GlaxoSmithKline, with the City consensus for little change in revenues from a year ago at £6.9bn and underlying profits up 2 per cent to £2bn.

The market hopes for an update from Glaxo about its plans to sell some consumer brands. The group is restructuring its consumer division, although key brands such as Lucozade, Sensodyne, Horlicks and Panadol are expected to be retained.

Analysts, meanwhile, expect sales growth from vaccines and also asthma and smokers’ cough treatment Advair, where higher prices in the US will offset a squeeze in Europe and other markets.

Struggling Clinton Cards posts full-year results on Thursday, with James Dilks-Hopper, an analyst at Numis Securities, expecting the group to report an 81 per cent slump in pre-tax profits to £2.5 million in the year to 1 August. Darcy Willson-Rymer, previously managing director of Starbucks UK and Ireland, joined earlier this month after founder, chairman and chief executive Don Lewin stepped down.

Publisher Bloomsbury is expected to reveal a further boost from electronic readers when it posts half-year figures on Thursday. Consensus forecasts for the year to 28 February are for profits of £9.2m, up from £7.7m a year ago.