Energy
BP profit slumps 91 per cent in fourth quarter
BP reported a 91 per cent decline in fourth-quarter earnings after average crude oil prices dropped to the lowest in more than a decade. The company’s shares fell the most since August.
BP reported a 91 per cent decline in fourth-quarter earnings after average crude oil prices dropped to the lowest in more than a decade. The company’s shares fell the most since August.
Profit adjusted for one-time items and inventory changes totaled $196 million, the London-based company said on Tuesday. That missed the $814.7 million average estimate of 10 analysts surveyed by Bloomberg. The net loss for the year was $6.5 billion, the most in at least 30 years.
While Chief Executive Officer Bob Dudley has trimmed billions of dollars of spending, cut thousands of jobs and deferred projects in response to the plunge in crude prices, BP’s cash flow still doesn’t cover spending and dividends. The CEO said in an interview that he’s re-tooling BP to balance cash flows at below $60 a barrel. The slump has driven BP’s market value below $100 billion for the first time since the Gulf of Mexico oil spill in 2010.
“It’s very disappointing,” Ahmed Ben Salem, oil and gas analyst at Oddo & Cie in Paris, said by phone. “We were expecting lower profit from upstream, but not a loss. The dividend payout is probably safe for this year, but if oil stays around $30 then they would have to cut capex further.”
Profit has been lower year-on-year for six consecutive quarters as oil prices tumbled. The average price of benchmark Brent crude slumped 42 per cent in the fourth quarter from a year earlier to $44.69 a barrel, the lowest since 2004.
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