London - BP reported third-quarter profit that beat analysts’ estimates after oil’s crash helped the UK energy company earn more from processing crude into fuels.
Profit adjusted for one-time items and inventory changes totalled $1.82 billion, 40 percent lower than a year earlier, according to a regulatory filing on Tuesday. That exceeded the $1.26 billion average estimate of 15 analysts surveyed by Bloomberg.
The sliding earnings underscore Chief Executive Officer Bob Dudley’s efforts to reduce spending to maintain dividends. BP is among international oil producers to forecast a prolonged price slump as global supply swamps demand. While cost cuts are helping the London-based company preserve cash, it may need to raise debt to cover payouts to shareholders this year, according to RBC Capital Markets.
“Last year, we acted decisively to reset BP for a sustained period of lower oil prices and the results are coming through well,” Dudley said in the statement. “We are now in action to rebalance our financial framework in this new price environment.”
BP fell 1 percent to 384.4 pence in London trading on Monday, valuing the company at about $108 billion. The stock has dropped 6.5 percent this year while rival Royal Dutch Shell, Europe’s No. 1 oil company, has declined 22 percent.
BP is the first of the world’s five largest non-state oil companies to announce earnings for the period. Shell, Total SA, Exxon Mobil Corp. and Chevron Corp. are all scheduled to report results later this week.
BP’s pretax adjusted profit from its downstream segment, which includes refining and trading, jumped to $2.3 billion from $1.5 billion. Earnings from oil and gas sales totalled $823 million compared with $3.9 billion a year earlier and $494 million in the preceding quarter.
BP has lowered its full-year capital-spending forecast to less than $20 billion after investing about $23 billion in 2014. Analysts including Barclays’ Lydia Rainforth and Oddo & Cie’s Ahmed Ben Salem said this month that the third quarter may mark a low point in European oil-company earnings and the cutbacks by BP and its peers will help them ride out the price rout.
BLOOMBERG