LONDON (Alliance News) - UK stocks jumped out of the blocks on Thursday with oil and gas major Royal Dutch Shell shares amongst the best performers in the FTSE 100 as its 2015 results met guidance.
The oil and gas major said current cost of supply (CSS) earnings excluding items more than halved year-on-year in 2015 to USD10.67 billion from USD22.56 billion, which is at the top end of Shell's guidance provided last month.
CSS earnings including items fell 80% during the year to USD3.84 billion from USD19.04 billion a year earlier, whilst income attributable to shareholders fell at an even steeper rate to USD1.93 billion from USD14.87 billion, representing an 87% fall.
Just after the London stock market open Shell 'A' and 'B' shares were up 3.6%.
The FTSE 100 index was up 1.0% at 5,897.69, the FTSE 250 was up 0.7% at 16,095.41 and the AIM All-Share was up 0.3% at 692.62.
In Europe, the French CAC 40 was up 0.9%, and the German DAX 30 was up 1.0%.
Asian stocks ended mixed, with the Nikkei 225 index in Japan closing down 0.9%, while Hong Kong's Hang Seng index closed up 1.0% and the Shanghai Composite up 1.5%.
Higher oil prices helped fuel the Asian session. Oil prices were up due to a weaker dollar after New York Fed President William Dudley said in an interview the weakening outlook for the global economy and additional strength of the US dollar could have "significant consequences" for the health of the world's largest economy.
In addition, unconfirmed talk of Russia opening talks with the Organisation of the Petroleum Exporting Countries over output cuts helped investors shrug off data showing an unexpected large surge in US crude inventories.
However, just after the London stock market open Brent oil slid traded at USD34.90, only slightly higher than the USD34.34 a barrel seen at the UK equity close on Wednesday. US benchmark West Texas Intermediate traded at USD32.29 a barrel.
AstraZeneca was the worst performer in the FTSE 100, down 3.9%. The company forecast a fall in revenue and its closely watched earnings per share for 2016, including dilutive effects from recent acquisitions, as it reported a rise in pretax profit for 2015.
The pharmaceutical company said pretax profit rose to USD3.07 billion in 2015 from USD1.25 billion a year before, despite seeing revenue fall to USD24.71 billion from USD26.55 billion, with the improved profit mostly the result of lower cost of sales and of selling, general and administrative costs.
AstraZeneca reported core earnings per share for the year of USD4.26, flat on the previous year at actual exchange rates, although up 7% at constant currency.
The company is guiding for a low to mid single-digit percentage decline in total revenue at constant currency, and a low to mid single-digit percentage decline in core earnings per share, also at constant currency. This guidance assumes loss of exclusivity in the US on its biggest seller, anti-cholesterol statin Crestor, from May.
Medical devices maker Smith & Nephew reported a fall in pretax profit for 2015 on higher costs, but saw earnings per share come in ahead of both 2014 and market expectations.
Smith & Nephew reported a pretax profit of USD559 million for 2015, down from USD714 million a year before, as a rise in revenue to USD4.63 billion from USD4.62 billion, was offset by higher selling, general and administrative costs. The company said it has taken an accounting charge of USD203 million in relation to settlements for legal claims related to metal-on-metal hip replacements.
It reported full year earnings per share of 85.1 cents, up from 83.2 cents a year before, and ahead of the 83.5 cents expected by analysts. Nevertheless, the company was one of the few fallers in the FTSE 100, down 0.9%.
On the gainers' side, Compass Group traded up 4.0%, making it one of the best blue-chip performers. The catering and support services business said its outlook for 2016 remains positive after reporting a rise in revenue during the first quarter of the financial year.
The company said organic revenue grew 5.9% year-on-year in its financial first quarter ended December 31, with like-for-like revenue also increasing thanks to modest pricing and some volume improvement.
Beazley said it had performed "very strongly" in 2015, seeing pretax profit rise and proposing both a higher regular dividend and a special dividend.
The FTSE 250-listed specialist risk insurance and reinsurance business reported a pretax profit of USD284.0 million for 2015, up from USD261.9 million a year before, as revenue rose to USD2.08 billion from USD2.02 billion.
Beazley proposed a second interim dividend of 6.6 pence, taking its total dividends for the year to 9.9p, up from 9.3p a year before. It also proposed a special dividend of 18.4p, up from the 11.8p special dividend it paid in 2014.
The company was one of the biggest gainers in the mid-cap index up 2.9%.
Still ahead in the economic calendar, the European Central Bank releases its monthly economic bulletin at 0900 GMT. The Bank of England will then announce its policy decision, and simultaneously release its meeting minutes and inflation report at noon.
In the afternoon, US continuing and initial jobless claims are at 1330 GMT, as are unit labour cost data and nonfarm productivity. US factory orders are at 1500 GMT.
By Neil Thakrar; neilthakrar@alliancenews.com; @NeilThakrar1
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