Big Oil is not so big anymore. Royal Dutch Shell posted a quarterly loss of $2.8 billion on Thursday, against a net profit of $8.5 billion a year earlier, as sliding oil prices and the global economic slump sapped earnings across nearly all the company's divisions. But even though 2009 will be a tough year for the industry, Shell has time--and production--on its side.

Although oil prices have fallen to around $40 per barrel, from a high of $147.50, in just six months, stripping out much of this extreme fluctuation--along with one-off items and currency effects--shows that Shell's profitability actually beat expectations. On a current-cost-of-supplies basis, free of one-off items, Shell's earnings came in at $4.2 billion, slightly higher than the $4.1 billion expected by analysts.

According to Peter Heijen, an analyst with Theodoor Gilissen, Shell's upstream business performed according to plan, with new production coming in from Australia and the Sakhalin-II project in Russia. Given that the lull in oil prices is not likely to last into 2010, and with Shell planning to make "significant investments" in the company, Heijen recommended buying the stock.

Shares of Royal Dutch Shell (nyse: RDSA - news - people ) ticked down 2 pence (3 cents), or 0.1%, to 17.74 pounds ($25.03), during morning trading in London. Rival BP (nyse: BP - news - people ) ticked up 0.2%. Both stocks outperformed the Dow Jones Euro Stoxx 50 index, which was down 1.1%, with the financial sector and mining companies depressing sentiment.

Shell also delivered a crowd-pleaser by hiking its 2008 fourth-quarter dividend by 11.0%, to 40 cents per share, as well as boosting its 2009 first-quarter dividend by 5.0%, to 42 cents per share.

Production over the year fell by 1.0%, to 3.3 million barrels of oil a day, with the lower oil price taking its toll on earnings. The resilient price of natural gas offset some of the pain: earnings from gas and power rose 55.0% over the year, to $981 million. As for Shell's downstream operations, the lack of demand for products like gasoline predictably knocked earnings down by 34.0%, on a current-cost-of-supplies basis, to $582 million.

Fitch Ratings said Thursday it has placed Charter Communications Inc.'s "CCC" issuer default rating on negative rating watch, after the cable operator said it will begin discussions with its bondholders about financial options to improve its balance sheet.

Fitch said the rating watch reflects its concern that the start of those discussions increases the likelihood that the company will engage in a broad-based distressed debt exchange or file for bankruptcy.

About $21.1 billion of the company's outstanding debt as of Sept. 30 is affected.

A "CCC" rating is non-investment grade, also known as "junk."

Charter, a St. Louis-based cable TV operator controlled by Microsoft Corp. (nasdaq: MSFT - news - people ) co-founder Paul Allen, reported interest costs of $478 million for the third quarter compared with operating income of $208 million. Allen no longer works for Microsoft.

Charter's shares were trading at 13 cents apiece Thursday afternoon.

Copyright 2008 Associated Press. All rights reserved. This material may not be published broadcast, rewritten, or redistributed

Fitch puts Charter on rating watch over debt woes

Fitch Ratings said Thursday it has placed Charter Communications Inc.'s "CCC" issuer default rating on negative rating watch, after the cable operator said it will begin discussions with its bondholders about financial options to improve its balance sheet.

Fitch said the rating watch reflects its concern that the start of those discussions increases the likelihood that the company will engage in a broad-based distressed debt exchange or file for bankruptcy.

About $21.1 billion of the company's outstanding debt as of Sept. 30 is affected.

A "CCC" rating is non-investment grade, also known as "junk."

Charter, a St. Louis-based cable TV operator controlled by Microsoft Corp. (nasdaq: MSFT - news - people ) co-founder Paul Allen, reported interest costs of $478 million for the third quarter compared with operating income of $208 million. Allen no longer works for Microsoft.

Charter's shares were trading at 13 cents apiece Thursday afternoon.

Copyright 2008 Associated Press. All rights reserved. This material may not be published broadcast, rewritten, or redistributed

The White House and Treasury Dept. said they are likely to help U.S. automakers avert bankruptcy after Republican senators defeated a bill late Thursday, Dec. 11, that would have provided $14 billion in taxpayer loans to the companies.

For weeks, Democratic senators have called on the White House to use some of the $700 billion Wall Street bailout fund to make loans to General Motors (GM) and Chrysler, and to provide a line of credit to Ford (F), which is not in as dire financial shape as its two rivals. But the White House told Congress the fund was not created for industries outside of banks and financial services companies.

After the auto-rescue bill died in the Senate following weeks of data indicating rising unemployment, however, the White House changed course. Another factor was the further decline in stock prices Friday morning, which analysts attributed to the likely bankruptcy of General Motors and Chrysler.

"Because Congress failed to act, we will stand ready to prevent an imminent failure until Congress reconvenes and acts to address the long-term viability of the industry," said Treasury spokeswoman Brookly McLaughlin.

A Breakdown over Wages?

Senate minority leader Mitch McConnell (R-Ky.) and Senator Bob Corker (R-Tenn.) said Thursday night on the Senate floor that negotiations broke down over the United Auto Workers' unwillingness to agree to a date for certain active workers' wages and benefits to be cut to match those of workers at non-union auto factories in the U.S., such as those of Toyota (TM) and Honda (HMC).

Senator Corker, who acted as a broker between the Republican caucus and the UAW and automakers, said Friday: "I feel a sense of surrealness today that we came so close to what would have been a landmark agreement."

Corker said he had asked the UAW to agree to language that would have made labor costs "competitive" with foreign-owned plants, and the definition would have been certified by the next Secretary of Labor. Democratic senators would not have supported the language unless the UAW agreed to it.

UAW President Ron Gettelfinger on Friday took issue with the characterization that the talks broke down because of wages. "The wages discussions were about politics in the Republican caucus," said the union leader. Gettelfinger said he didn't want to get pinned down to specific language in the bill over "parity" or "competiveness" because comparisons between Detroit and foreign automakers are complicated by the benefits held by the vast pool of union retirees.

Negotiation Successes

The union, in negotiations with Corker on Thursday, agreed to take half of $21 billion of future health-care and benefit payments owed to it by the automakers in stock rather than cash. And they agreed to negotiate wage "competitiveness" over the next three months. Big investors and banks that hold automakers' bonds also agreed to accept a 70% writedown on the face value of their investments, and to take half of the rest in stock.

The bill language gave authority to a government-appointed "car czar," who would have had to certify the financial "viabaility" of the automakers by Mar. 31, including wage competitiveness. But Republican senators wanted specific language in the bill to address labor. Gettelfinger said that tactic was designed to "pierce the heart of organized labor."

Corker, despite his freshman status in the Senate, emerged as a major player in negotiations during the past three weeks as he came to favor a government-facilitated restructuring of the automakers instead of a having them reorganize under Chapter 11 bankruptcy.

Corker encouraged Treasury Secretary Henry Paulson to adopt as much of the framework of the Senate bill as possible in granting the automakers some of the Wall Street bailout funds. "What we put forth in the bill, and nearly got a deal on, were loan covenants that the Treasury Secretary could adopt by fiat," said the senator.

Details of how Treasury may help the automakers are expected to emerge over the next few days.

Microsoft said Tuesday it has opened a new research center in Switzerland to develop internet telephony software, also known as Voice-over-IP.

The U.S. tech giant said the center, located in Zurich, will grow from 45 to 200 staff over the next three years.

Microsoft Corp. (nasdaq: MSFT - news - people ) said in a press release that the site complements three other centers developing communications software in Beijing, China; Hyderabad, India; and Redmond, Washington.

Jordan Fired, Tapscott to Take Over (Updated)

The Wizards have relieved Coach Eddie Jordan of his duties. Jordan was informed of the decision this morning around 8 a.m. shortly after he and his wife, Charrisse, handed out Thanksgiving turkeys to the needy at a team-sponsored charitable event. Associate Head Coach Mike O'Koren was also let go.

Ed Tapscott, who had carried the title of Director of Player Development but traveled with the team and essentially served as an extra assistant coach, takes over on an interim basis. The team is practicing right now.

The Wizards are off to a 1-10 start and hit rock bottom with Saturday night's 122-117 loss to a short-handed Knicks squad that was without its two leading scorers and used seven players. The Wizards rank near the bottom of the league in several statistical categories and have only one player (Antawn Jamison) who is performing anything close to a high level.

How much of the poor start can be attributed to Jordan is highly debatable. Injuries to Gilbert Arenas and Brendan Haywood left him without his best player and best center. Veteran guard Antonio Daniels has been limited to six games due to a right knee injury and the rest of the team's veterans -- players like Darius Songaila, Etan Thomas and Andray Blatche -- have performed at a subpar level.