(Adds details and consequences of error, share price)
Jan 30 (Reuters) - Royal Dutch Shell said on Fridayit had overstated its fourth quarter results by $178 million dueto an error in the valuation of its fuel inventory.
The company said its underlying earnings, which are mostclosely watched by analysts and investors, were unaffected bythe mistake.
"A stock valuation error in its downstream operations wasdiscovered," Shell said in a statement.
"Royal Dutch Shell's fourth quarter and full year 2014earnings, on a current cost of supplies (CCS) basis areunchanged," the company said in the statement.
However, as a consequence of the error, Shell reduced fourthquarter income to shareholders from $773 million to $595million. Full year income was cut from $15,052 million to$14,874 million.
Shell shares were down 1.8 percent to 20.22 stg each at 1631GMT.
The Anglo-Dutch energy company reported on Thursdayfourth-quarter 2014 adjusted net income of $3.3 billion whichwas weighed down by weaker than expected earnings from oil andgas production.
Shell, the largest of the European energy majors, alsoannounced a relatively modest three-year, $15 billion cut inspending to help it weather the plunge in oil prices.
(Editing by Elaine Hardcastle)