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Why Royal Dutch Shell Plc, AstraZeneca plc and Antofagasta plc Should Lag The FTSE 100 Today

The FTSE 100 (FTSEINDICES: ^FTSE) is retreating a little after five sessions of rises in a row, losing 32 points to 6,746 by noon. Although London’s top index has been buoyed in recent days by positive earnings, disappointing results from some of its star members lie behind today’s reversal.

We take a look at three companies holding the FTSE 100 back today:

Royal Dutch Shell

A disappointing performance miss from Royal Dutch Shell sent its shares down 109p (4.8%) to 2,168p this morning. Third-quarter earnings on a current-cost-of-supplies (CCS) basis crashed 32%, to $4.2bn from $6.2bn a year previously — a fall had been expected, but not one that big.

Also on a CCS basis, earnings per share excluding exceptional items fell 32% from a year ago, to 71 cents per share — but Shell’s quarterly dividend has been raised 5% to 45 cents per share.

Chief executive Peter Voser said “We are facing headwinds from weak industry refining margins, and the security situation in Nigeria, which continue to erode the near term outlook“, but reiterated that Shell is committed to rewarding its shareholders through dividends.

AstraZeneca

A third-quarter update from AstraZeneca also caused disappointment, with loss of exclusivity on several drug brands leading to an expected 4% fall in revenue to $6,250m. But that fall, compounded with increased research investment, led to a 20% fall in pre-tax profit to $1,592m and a 16% drop in earnings per share to 99 cents.

But on the upside, the company told us its late-stage pipeline is continuing to grow, with candidates olaparib, selumetinib and benralizumab all progressing to the Phase III clinical programme stage.

Today’s drop takes AstraZeneca shares to a P/E of 10.6 based on full-year forecasts — with a 5.5% dividend yield predicted, could they be a bargain now?

Antofagasta

Our third FTSE 100 faller today is Antofagasta (LSE: AZN), after investors reacted negatively to the copper miner’s Q3 production report.

Volumes of the brown metal were in line with expectations, with 174,200 tonnes of the stuff produced in the quarter — 3.4% down on the previous quarter, but 4.4% up year-to-date. And though output fell 11.7% on the quarter to 67,700 ounces, year-to-date production rose 8% to 230,600 ounces.

Forecasts for the full year are unchanged, but fears of a surplus of copper over the next few years pushing prices down further is what hit the share price today.

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> Alan does not own any shares mentioned in this article.