Bumper profits will continue to roll in for the City's biggest companies this week as BP and GlaxoSmithKline prepare to follow the record performances of rivals Royal Dutch Shell and AstraZeneca.

Investors will be interested in what GlaxoSmithKline has to say about asthma drug Advair when it announces its full year results on Wednesday.

More than £4 billion was wiped off the value of Glaxo in one day in November after authorities in the United States proposed changes to t he way the drug was labelled. Nevertheless, analysts are upbeat about the results, with turnover expected to be around seven per cent higher sending pretax profits for the 12 months to New Year's Eve up from £5.78 billion to £6.62 billion.

Rolls-Royce - one of the market's best performing stocks in 2005 - pleasantly surprised investors with positive interim results last July so the City will be hoping for more good news when the aerospace group reports its finals on Thursday.

Peter Caldwell, analyst at Barclays Stockbrokers, said he expected good growth to be underpinned by improving civil aviation deliveries, as well as continued benefits from its after-sales service - an area that has driven its recovery from the aviation downturn seen after the September 11 terrorist attacks.

Charles Stanley analyst Jeremy Batstone forecast pretax profits for the 12 months to December 31 to be £640 million compared with £110 million a year ago.

However, the celebrations could well be overshadowed by developments at Rolls Royce's defence arm, where investors will be looking for an update on the proposed engine for the US Joint Strike Fighter, the F-35.

Speculation is already flying that, despite personal appeals by Tony Blair to George Bush, the $2.4 billion (£1.36 billion) deal has been shot down by the Pentagon.

Official confirmation is expected from Congress today, but it is thought the US has dropped the RollsR oyce/General Electric engine to concentrate solely on the development of a Pratt & Whitney rival.

The loss of such a contract would be a blow to both Rolls-Royce investors and the company.

Although funded until the autumn - whatever the decision - some 340 workers could be redeployed or made redundant as a result.

The flow of results from the oil sector continues tomorrow when BP reports annual numbers, but the UK's largest company by market value is not expected to top the profits performance of major rival Royal Dutch Shell. A consensus of seventeen analysts suggests BP will report $5.6 billion (£3.15 billion) profit for its fourth quarter, meaning that the oil giant will have banked $21.7 billion (£12.2 billion) over the year as a whole.

That would represent profit up a third from its haul of $16.2 billion (£9.1 billion) in 2004. This is despite a trading statement last month in which BP warned investors that the devastating hurricanes in the United States had cost it more than $1 billion (£569 million). ..SUPL: