BP Announced Third Quarter Earnings, Profits Increase

BP plc (ADR) (NYSE:BP), the British energy giant, announced its third-quarter financial results on Tuesday, with earnings increasing after three quarters of losses.  According to the report, BP’s replacement cost profits for the third quarter rose 35% to $1.66 billion. In the same period last year, the profit was $1.23 billion in total. The result included net gain of $728 million for fair value accounting effects and non-operating items. The reversal of earnings was due to the cost reduction, which helped to offset the weakness in oil prices. Adjusted for the effect of fair value accounting effects and non-operating items, the underlying replacement cost profits was $933 million for the third quarter, which was less than $1,819 million in the same period last year.

Net cash from operating activities was $2.5 billion in the third quarter, decreasing from $5.2 billion the same period last year. Excluding certain items, net cash from operating activities was $4.8 billion, compared with $5.4 billion the same period last year.  In the statement, BP also announced quarterly dividend of $0.1 per share, and $0.6 per ADS. The dividend is expected to be paid on 16 December 2016.

“We continue to make good progress in adapting to the challenging price and margin environment. We remain on track to rebalance organic cash flows next year at $50 to $55 a barrel, underpinned by continued strong operating reliability and momentum in resetting costs and capital spending.” Brian Gilvary, BP’s Chief Financial Officer, said in the announcement.  The company also adjusted its guidance for capital expenditure to be about $16 billion this year, compared with previous expectation of between $17 and $19 billion. BP hopes its total costs to be $7 billion lower in 2017 compared with that of 2014.

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