Investec has put its 'hold' rating for Royal Dutch Shell under review after a 'substantial miss' by the oil producer in the fourth quarter.

Fourth-quarter clean net income came in at $5,582m - this was well below the $6,357m Investec forecast and the consensus estimate of $6.2bn (the broker pointed out that the consensus forecast had come down from around $7bn just four weeks ago).

Investec highlighted that, worryingly, the miss came from the upstream division. "Americas still in loss, but with Asia-Pacific undershooting our forecast too - clean net income of $4.4bn vs consensus $5.5bn. Part of this can be explained by a higher exploration charge (though this reflects the mixed results of the programme and is not an exceptional)."

Meanwhile, another negative surprise came from the company's capital expenditure (capex) guidance in a separate statement. After spending $32.57bn in 2012, the company said that gross capes would be $34bn in 2013, above the $31.5bn that Investec was expecting.

"The company is unlikely to comment on the capex outlook for 2014 and beyond, but we think spending is set to be higher, for longer," the broker said.

Shares were down 1.73% at 2,265.5p by 11:22 on Thursday.

BC

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