BP's $4.3bn Q4 profit below forecasts
Published 03/02/2010 | 05:00
BP, Europe's second-largest oil company, yesterday reported a net profit of $4.3bn (€3.08bn) for the fourth quarter. This was up from a loss a year ago but short of analysts' estimates and due to weak earnings on refining.
The company had made a loss of $3.3bn in the fourth quarter of 2008 but a profit of $5.3bn in the third quarter of 2009. The fourth-quarter profit was about 5pc below analysts' consensus forecast, according to Evolution Securities, and BP said it expected refining margins to remain weak and production to drop this year.
The stock slumped 4.5pc to 568p on the London Stock Exchange.
Replacement cost profit, a key oil industry measure, was $3.45bn compared to $2.6bn in the fourth quarter of 2008, but down from $4.98bn in the third quarter.
BP declared a dividend of 14 cents per share, unchanged from the third quarter or from a year ago.
"The group has performed well against a weak operating background," said Tony Shephard, analyst at Charles Stanley, who noted that BP had cut its cash costs by $4bn during the year "and further efficiencies are expected".
"While it is disappointing, the results came in below consensus, the market had clearly got a bit ahead of itself," said Jonathan Jackson, analyst at Killik & Co.
Analysts said there would be more cues to BP's prospects coming from a strategy meeting in March.
"While we don't expect the level of cost cutting to continue at the same pace as last year, we believe there is still plenty for the group to go for," Jackson said.
Fourth-quarter results reflected a weaker refining and marketing environment.
BP said its refining indicator margin, a broad measure of profitability, dropped from $5.20 a barrel in the last quarter of 2008 to $1.49 a barrel in the recent period.
For the full year, BP said its net profit was $16.6bn, down from $21.2bn in 2008.
Replacement cost profit for the year was down 45pc to $13.96bn. (AP)