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BP gushes to record profit
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May 8, 2001: 12:37 p.m. ET
British oil company reports seventh successive quarter of record profits
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LONDON (CNN) - The world's No. 3 oil company, BP PLC, reported its seventh successive record quarter of profits as it topped forecasts for the period.
The British company announced a first-quarter earnings of $4.1 billion, or $1.10 per American depository shares, on Tuesday, up 52 percent from the $2.7 billion, or 84 cents per ADS, it reported a year earlier. Analysts surveyed by U.S. earnings tracker First Call were looking for $1.03 per ADS in the quarter.
The results were helped by higher natural gas prices in North America and production at record levels, up 13 percent on a year ago. Crude oil prices had come off their previous quarter's highs.
The company's pro forma operating profit from exploration and production was responsible for most of the improved results, as it climbed to $5.1 billion from $3.2 billion a year earlier. Earnings from gas and power operations slipped to $112 million from $142 million a year earlier, while profit from chemicals plunged to $81 million from $259 million a year earlier, as the higher energy and raw material costs hit results there. But operating income from refining and sales increased to $994 million from $584 million.
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Chart shows trading of BP's American depository shares. | |
BP (BP: down $0.70 to $51.30, Research, Estimates) shares have outperformed their two larger rivals, Exxon Mobil Corp. (XOM: down $0.42 to $87.77, Research, Estimates) and Royal Dutch/Shell, rising more than 10 percent due to its greater benefit from the energy price boom in the United States. Its acquisitions there, Amoco and ARCO, contributed to the good results.
"The result reflects the positive environment, but also continuing performance improvements ... with higher reported production being a particular feature," commented BP Group Chief Executive John Browne.
BP shares lost 11 pence, or 1.8 percent, in London trading on the announcement to 600 pence, with the sector flat. Many analysts believe the stock is near a peak after rising from a low of 515 pence in December. Some said they were hoping for even better results from BP, despite the fact it topped consensus forecasts.
"Everyone has bought BP for its U.S. exposure," Merrill Lynch analyst Jon Wright told Reuters. "It's delivered on that to an extent, but not as much as people had hoped, and now the U.S. environment is easing; refining margins are coming back, gas prices are easing off."
Royal Dutch/Shell Group, the world's No. 2 two oil company, reported a fifth consecutive record quarter last week with net profit, excluding items, rising to $3.855 billion from $3.13 billion a year ago. Exxon Mobil, the world's largest oil company, also topped forecasts on sharply higher earnings.
BP has been ahead of Shell in concentrating on the United States. Its rival suffered a blow when it had to give up on its bid to acquire the American natural gas producer Barrett Resources on Monday.
Environmental campaigners, angry at U.S. attitudes to greenhouse gas emissions, urged British motorists on Tuesday to boycott fuel stations run by Exxon Mobil under the Esso name. 
-- Reuters contributed to this report.
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