BP Beats 1Q Profit Expectations, Sees Solid Production
BP plc reported adjusted net income of $3.2 billion for the first quarter, beating consensus expectation by 4 percent according to New York-based investment bank Jefferies – whose analysts themselves had been expecting an even better figure of $3.3 billion.
BP's production was slightly better than Jefferies expected, with the firm producing at an average first-quarter rate of 2.13 million barrels per day – 2 percent greater than Jefferies' estimate.
BP's Upstream business reported $4.4 billion underlying pre-tax replacement cost profit for the quarter, compared with $3.8 billion for the previous quarter and $5.7 billion for 1Q 2013. The firm said that after its decision to create a separate BP business around onshore oil and gas activities in the United States, it has decided not to proceed with development plans in the Utica shale.
The Downstream unit reported $1 billion underlying pre-tax replacement cost profit for the first quarter, compared with $70 million for 4Q 2013 and $1.6 billion for 1Q 2013. The result here was primarily affected by a weaker refining environment.
BP added that it is now nearing completion of its current $8-billion share buyback program, with $7.6 billion spent repurchasing shares for cancellation. So far, the firm has agreed divestments totaling more than $3 billion – including the recent agreement to divest a number of assets in Alaska – towards its expectation of agreeing $10 billion in additional divestments by the end of 2015.
Commenting on the results, BP Group Chief Executive Bob Dudley said in a company statement:
"This is a very solid start to 2014. Operating cash flow was strong in the first quarter, we have seen further exploration success and upstream project start-ups, and the upgraded Whiting refinery is ramping up steadily. We remain confident of delivering our 10-point plan targets that we set in 2011 for delivery in 2014.
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