BP profits beat analyst expectations despite sliding crude prices
BP reported profit that beat analyst estimates as a strong refining performance offset the effect of lower oil and natural gas prices, and bad weather that curbed production.
The positive result will please investors expecting a gloomy third quarter for Big Oil. Crude prices have fallen as the US-China trade war stokes demand concerns, while American output has flooded the market.
"BP delivered strong operating cashflow and underlying earnings in a quarter that saw lower oil and gas prices, and significant hurricane impacts," CEO Bob Dudley said. He is due to stand down next year and will be replaced by Irish executive Bernard Looney.
BP said adjusted net income was $2.25bn (€2bn) in the quarter, exceeding the average analyst estimate of $1.77bn. That compares with profit of $3.84bn a year earlier, when BP decided to buy a $10.5bn package of US shale assets in cash rather than shares because it was so confident oil prices would stay high.
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This year, the London-based company took the unusual step of issuing a statement before earnings to flag up factors affecting business in the third quarter.
BP warned it would pay a tax rate of about 50pc, higher than the expected full-year rate of 40pc. It also signalled that gearing - a measure of debt to equity - would remain above its target range. The company also gave advance warning of a non-cash impairment charge from the sale of gas assets in the US.
That amounted to $2.61bn in the quarter, meaning the company reported a net loss of $749m.
"It looks like a decent result, although worth keeping in mind that this comes after heavy downgrades in recent weeks," said Morgan Stanley analyst Martijn Rats.
"As recent as early October, the consensus third-quarter net income was still $2.7bn."