BP shows strong earnings growth on high oil price

BP (BP.) today announced 1st quarter results which exceeded analysts’ expectations. Replacement cost profit, which strips out the effect of changes in the value of inventories and fluctuations in the oil and gas price, was $5.6 billion for the quarter, up from $2.39 billion in the same period a year ago and ahead of expectations of $4.8 billion . Earnings per share were up 134 per cent at 29.82 cents, boosted by oil prices which averaged $71.86 during the quarter, compared with $41.26 during the same period last year.

Stripping out exceptionals, the rise in earnings was 118 per cent, well above analysts’ average expectations of a rise of about 85 per cent. The oil and gas exploration and production business reported a 94 per cent rise in operating profit over the year to $8.3bn, although this was slightly lower than in the final quarter of 2009. In refining and marketing, profits fell 33 per cent compared to the first quarter of 2009 to $729m. However, this still marked a sharp improvement from the $1.9bn loss reported for the fourth quarter of 2009. BP’s net debt dropped to $25.2bn at the end of March, down from $26.2bn at the end of last year. The company said that oil and gas production was unchanged at 4.01 million barrels of oil equivalent per day. TNK-BP, the group’s Russian joint venture, also lifted overall profits. Net income from TNK-BP increased to $543 million, compared with $134 million a year ago. The group kept its dividend frozen at 14 cents per share.