BP profit more than doubles in Q1
LONDON, England — BP PLC, Europe’s second-largest oil company, yesterday said that first-quarter profit more than doubled from a year earlier to US$6.1 billion due to higher crude prices and lower production costs and taxes.
Despite handily beating analysts’ forecasts, BP shares fell slightly yesterday as the market continued to worry about the impact of the oil spill from the sunken Deepwater Horizon rig which BP operates in the Gulf of Mexico.
BP’s net profit compared with US$2.6 billion in the first quarter of 2009 and US$4.3 billion in the fourth quarter.
Replacement cost profit, a key oil industry measure, rose 62 per cent to US$5.6 billion from US$3.4 billion in the fourth quarter and US$2.4 billion in the first quarter a year earlier.
Revenue of US$74.4 billion was up one per cent from US$73.6 billion in the fourth quarter and 55 per cent higher than revenue of US$48.1 billion a year earlier.
The quarterly dividend of US$0.14 a share was unchanged from a year ago.
“As strong as this performance was, we expect near-term sentiment toward BP to be dominated by the sinking of Transocean’s Deepwater Horizon rig and BP’s efforts to contain the subsequent spill. This issue aside, we still see better momentum and value in Royal Dutch Shell,” which reports results tomorrow, said Gordon Gray and James Evans, analysts at Collins Stewart.
BP shares were down 0.6 per cent at 622.8 pence on the London Stock Exchange. They traded at 655.4 pence on the day before the oil rig disaster.
“Progress has been driven by a near doubling in the oil price, a three per cent reduction in unit production costs, along with favourable accounting effects and a lower tax bill,” said Keith Bowman, analyst at Hargreaves Lansdown Stockbrokers.
“On the downside, the accident in the Gulf of Mexico continues to overshadow, while refining remains challenging and group production levels flat,” Bowman added.
Oil prices in the first quarter averaged US$76 a barrel compared to US$41 a year earlier. On Monday, light sweet crude traded at around US$84 a barrel.
