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BP p.l.c. Message Board

  • cramermadmoney cramermadmoney Feb 2, 2010 5:35 AM Flag

    BP Sees ‘Slow’ Recovery as Profit Misses Estimates: -4.8% in London


    Major sell-off in London....told you to sell few days ago...LOL

    BP fell as much as 4.8 percent and traded 22 pence lower at 572.60 pence as of 9:45 a.m. in London

    BP Sees ‘Slow’ Recovery as Profit Misses Estimates
    February 02, 2010, 04:51 AM EST More From Businessweek
    By Brian Swint and Eduard Gismatullin

    Feb. 2 (Bloomberg) -- BP Plc, Europe’s biggest oil company, expects the recovery from last year’s recession to be “slow and gradual” as fourth-quarter earnings missed analyst estimates.

    Chief Executive Officer Tony Hayward, who beat last year’s cost-cutting target and ramped up operations in the Gulf of Mexico to become Europe’s leading energy producer, said output will be “slightly lower” in 2010. Refining margins will “remain depressed” for the time being, he said.

    “They have disappointed relative to some reasonably high expectations,” said Christopher Wheaton, who manages about $400 million at Allianz RCM’s Energy Fund in London. “What’s really disappointing is the refining business, which has struggled.”

    BP, the first of Europe’s oil majors to report earnings, will be followed by The Hague-based Shell in two days. Exxon Mobil Corp., the largest U.S. company, posted a fifth straight drop in quarterly profit yesterday to $6.05 billion. Chevron Corp., the second-largest U.S. energy company, reported a 37 percent drop in earnings to $3.07 billion.

    ‘Very Strong’

    “Our operational performance in the fourth quarter and through 2009 was very strong,” Hayward said in a Bloomberg Television interview. “Refining margins in the fourth quarter were the lowest for 15 years and, to date, BP is the only company that’s made any money in the downstream business in the fourth quarter at all.”

    Net income of $4.3 billion, or 23 cents a share, compared with a loss of $3.3 billion, or 18 cents a share, a year ago, London-based BP said in a statement.

    Production rose 4 percent to 3.998 million barrels of oil equivalent a day in 2009, BP said. Output is expected to be lower this year because of the absence of a “significant” hurricane season in 2009. BP replaced its reserves by 129 percent last year, marking a 17th year in which it found more resources than it extracted.

    “We expect to see the demand for oil rise by between 500,000 and perhaps 700,000-800,000 barrels a day in 2010, reflecting a gradual restoration of global economic growth,” Hayward said in today’s interview. Oil prices are likely to trade between $60 and $90 a barrel during the next few years, he said.

    Shares Drop

    BP fell as much as 4.8 percent and traded 22 pence lower at 572.60 pence as of 9:45 a.m. in London. The stock has risen 18 percent over the past 12 months, compared with a 0.7 percent gain for Shell, which BP overtook in terms of market value last month. The Dow Jones Europe Oil & Gas Index is up 19 percent.

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