February 4, 2014 / 7:51 AM / in 4 years

UPDATE 2-Strong LNG arm helps to steady BG after profit warning

* Q4 earnings $1.14 bln, in line with forecasts

* 2013 earnings flat, excluding impairment charge

* Shares up 3 pct, trimming losses from profit warning (Adds analyst’s comment, share price reaction)

By Kate Holton and Sarah Young

LONDON, Feb 4 (Reuters) - Asian demand for liquefied natural gas (LNG) helped oil and gas producer BG to meet quarterly earnings forecasts on Tuesday and reassure investors after a profit warning last week.

BG posted fourth-quarter earnings of $1.14 billion and said it was making progress on major growth projects in Australia and Brazil - while needing to address problems in Egypt which sparked last Monday’s warning.

It also increased its full-year dividend by 10 percent to 28.75 cents per share.

BG said last week its 2013 earnings would be hit by a $2.4 billion post-tax impairment charge due mainly to turmoil in Egypt, and also downgraded this year’s production outlook.

The company warned output would be 11 percent lower in 2014 than analysts were expecting and also cut a 2015 production forecast by as much as 14 percent.

“Last week’s production downgrade and pre-release of earnings-guidance was tough to swallow, but with no further surprises in BG’s fourth quarter results ... we see BG on the road to recovery,” Bernstein analyst Oswald Clint said.

He said LNG shipping and marketing operating profit was up 18 percent year on year, 9 percent ahead of his estimate and at the upper range of BG’s guidance.

Shares in the company, which have lost 18 percent of their value since the profit warning eight days ago, traded up 3.1 percent at 1016 GMT, topping Britain’s blue-chip index.

Over the past 18 months, BG has cut its output forecasts three times, including abandoning a goal to produce 1 million boed (barrels of oil equivalent per day) by 2015, and will have posted two straight years of falling production before output growth is restored in 2015.

The company’s earnings for the three months to the end of December were 11 percent higher than the same time the year before, due in part to lower hedging losses and increased sales of LNG to high-value Asian markets.

BG said that excluding the impairment charge, 2013 earnings came in flat at around $4.4 billion.

The company, which counts on Egypt for about a fifth of its production, said in January the government there had not honoured agreements covering its share of gas from fields and as a result it had served so-called “force majeure” notices to affected buyers and lenders - effectively freeing all sides from contract terms due to circumstances beyond their control.

Including the impairment charge, disposals and re-measurements, total 2013 earnings were down 33 percent. (Editing by Mark Potter)

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