Major Profit Warning At Royal Dutch Shell Plc

royaldutchshellThe shares of Shell (LSE: RDSB) (NYSE: RDS-B.US) opened 4% lower at 2,224p this morning, after the oil giant issued a fourth-quarter profit warning. They’ve since recovered a bit, but remain 2.3% down on the day.

Shell, one of the largest oil and gas producers in the world, claimed that its profits for the quarter would be ‘significantly lower’ than recent levels.

The market had been expecting Q4 earnings of around $4bn, but after today, Shell suggested $2.2bn would be a closer estimate. This compares to the $7.3bn the oil giant earned in the same quarter last year.

Shell blamed lower upstream volumes, higher exploration costs and tough market conditions downstream as key contributors to its poor performance.

In a statement, Shell CEO Ben van Beurden remarked:

Our 2013 performance was not what I expect from Shell. Our focus will be on improving Shell’s financial results, achieving better capital efficiency and on continuing to strengthen our operational performance and project delivery.

It is now expected that Shell delivered profits of roughly $16bn in 2013, compared to $27bn the previous year.

With a market cap of £137bn, Shell trades at roughly 10 times its forward earnings, and offers a prospective dividend yield of 5.2%.

Of course, whether Shell shares still offer good value today is for you to decide.

If you're interested in big blue chip portfolio stalwarts, I've helped pinpoint five companies that offer a mix of robust prospects, illustrious histories and dependable dividends, in the Fool's "5 Shares You Can Retire On" report!

Just click here to get your free copy now.

Mark doesn't own any shares mentioned in this article.