AM update: Shell profits double, Vodafone sales slip, pound down

Some sharp improvements overnight for Asian stocks, bar China & Hong Kong. The Nikkei stormed almost +1.70% higher helped by a lower yen and a +12.1% surge for Fujifilm Holdings following the announcement of a new joint venture with Xerox. Hino Motors was up +8%. However the Shanghai Composite fell more than -1.2% following negative manufacturing soundings with Shenzhen stocks hitting a six-month low. 

Last night the Federal Reserve kept US rates steady though the mood music was clear: inflation and consumer confidences is rising and the Fed expected this to continue. Hence more rate climbs en route. “Inflation on a 12-month basis is expected to move up this year and to stabilize” said the Fed. This was also Janet Yellen’s last official Fed announcement; her successor Jerome Powell takes the top seat at the weekend.  

Overnight the pound was down -0.17% at 1.4173 against the dollar and -0.02% lower against the euro. The pound has had a brilliant January thanks to tougher talk from the Bank of England and better economic numbers (improved Q4 GDP), aside from the effects of a wilting dollar. 

But big gaps on progress remain. Theresa May is fighting a move by Brussels that would give EU citizens full residency rights during the Brexit transition period, heightening the risk of a ‘hard’ Brexit should a deal hit the rocks. 

• UK FTSE 100 7,533.55 +0.72%
• DAX 13,189.48 -0.06%
• CAC 40 5,481.93 +0.15%
• Euro Stoxx 600 395.46 -0.17%
• Dow 26,149.39 +0.28%
• S&P 500 2,823.81 +0.05%
• Nasdaq 7,411.48 +0.12%
• Nikkei 225 23,816.33 +0.03%
• Gold 1,345.80 +0.20%
• Oil WTI 64.76 +0.05%

Profits surge for Shell in "transformative" year

Shell has announced a doubling in profits for the last quarter of 2017. Going on a current cost of supply measure which erases currency blips Shell’s quarterly profits lifted +199% to $4.3bn. However Shell had to absorb a $2bn charge in the last quarter from new US tax regime moves. 

Rising oil prices are seeing oil giants emerge from a long period of stagnant returns where there was much focus on cost-cutting initiatives. This helped some become more cash-generative and resilient, especially on the dividend front. Shell shares at 2,496.50p are up more than +64% in the last two years. 

Shell recently entered the consumer power supply market with a tie-up with First Utility. “Our relentless focus on value, performance and competitiveness,” said Shell boss Ben van Beurden, “meant we were able to deliver $39bn of cash flow from operations excluding working capital movements from our upgraded portfolio."

Vodafone sales slip in the last quarter: Shutterstock

Vodafone sales down

Vodafone released new quarterly numbers this morning to 31 December. Group revenues slipped -3.6% to €11.8bn while service revenues were +1.1% up to €10.2bn. Vodafone boss Vittorio Colao says the company saw its best quarter for customer growth in high speed broadband in Europe. 

“An improved performance at Vodacom helped to offset a more promotional quarter in some European countries, particularly in Spain.” He added: “Overall, this consistent performance underpins our confidence that we will meet our guidance for the full year." Vodafone shares are up just +0.27% in the last six months and -0.31% lower in the last week.

Breaking news: Unilever says full-year profits came in at €6.5bn. The Dove Soap boss Paul Polman said 2017 saw Unilever become more resilient. Irn Bru-maker AG Barr said it anticipates sales of £277m for the full year to 27 January, up +7.5%.