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

Royal Dutch Shell Plc (LON: RDSB), AstraZeneca plc (LON: AZN) and Aggreko plc (LON: AGK) all slide.

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The FTSE 100 (FTSEINDICES: ^FTSE) is continuing its positive week, up another 21 points to 6,642 approaching midday for a gain of 87 points on the week so far. Today the index had been affected by mixed earnings reports, but has been buoyed by generally positive noises from the US Federal Reserve yesterday — growth is uncertain, but inflation is still low. The latest Chinese manufacturing figures remain upbeat too.

But which of today’s updates have held back the FTSE? Here are three that resulted in share price falls:

Royal Dutch Shell

Shares in Royal Dutch Shell slumped 115p (5%) to 2,204p this morning after first-half earnings, on a current cost of supplies (CCS) basis, fell 20% to $3.6bn — for Q2 itself, earnings crashed to $2.4bn from $6bn in the same quarter last year. Basic earnings per share (EPS) for the quarter, again at CCS, fell 21%, though the Q2 dividend was lifted 5% to 45 cents per ordinary share.

Chief executive Peter Voser said “Higher costs, exploration charges, adverse currency exchange rate effects and challenges in Nigeria have hit our bottom line. These results were undermined by a number of factors – but they were clearly disappointing for Shell“.

AstraZeneca

AstraZeneca reported a 4% fall in second-quarter revenue, to $6.23bn, with loss of exclusivity on several drugs knocking an estimated $500m off sales. Adjusted pre-tax profit for quarter fell 10% at constant exchange rates, with adjusted EPS down 21% to $1.20. For the half, pre-tax profit slipped 16% with EPS also down 21%.

The fall-off in revenue from traditional drugs was largely anticipated, and with plans for the future underway chief executive Pascal Soriot told us that “We continue to invest in distinctive science, our pipeline projects, products and key markets and our five key growth platforms delivered a double-digit increase in revenue contribution“.

Aggreko

Aggreko shares fell 105p (5.8%) to 1,676p, also on the release of second-half figures. In this case, the provider of power and temperature control equipment reported a rise in revenue, of 4% to £760m, but pre-tax profit slipped by 2% to £146m with EPS dropping 4% to 39.94p. At least the dividend was up, by 10% to 9.11p per share — a similar rise in the final dividend would give shareholders a modest 1.6% yield.

Despite these poorer-than-expected first-half figures, chief executive Rupert Soames seemed upbeat, saying “Our expectations for the full year remain unchanged“. The City is currently forecasting an 8% fall in EPS, with the shares on a forward P/E of 19.

Finally, reliable dividends can more than compensate for the day-to-day ups and downs of share prices. So how about a company that’s offering a 5% yield and which could be set for some nice share price appreciation too?

It’s the subject of our BRAND-NEW report, “The Motley Fool’s Top Income Share For 2013“, which you can get completely free of charge — but it will only be available for a limited period, so click here to get your copy today.

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

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

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