Shares in BP (LON:BP) have climbed into positive territory today as the oil major updated investors on its first-quarter performance, posting a rise in profits on the back of stronger crude prices. The update comes shortly after the FTSE 100 group unveiled that it had appointed former Statoil and BG Group boss Helge Lund as its new chairman.
As of 08:51 BST, BP’s share price had added 0.69 percent to 541.70p. The stock is outperforming the broader UK market, with the benchmark FTSE 100 index having climbed marginally higher and currently standing 0.14 percent up at 7,519.69 points.
BP posts surge in Q1 profits
BP reported in a statement this morning that its underlying replacement cost profit for the first three months of the year had climbed to $2.6 billion, compared with $1.5 billion in the prior-year period, with the group’s upstream division reporting its strongest quarter since third quarter 2014 on both a replacement cost and underlying basis. The company further saw continued earnings growth at its downstream division.
“We have delivered another strong set of results,” BP’s chief executive Bob Dudley commented in the statement. “Moving through 2018 we're determined to keep delivering our operational targets and maintaining capital discipline while growing cash flow and returns.”
BP also disclosed that its Gulf of Mexico oil spill payments in the quarter were $1.6 billion on a pre-tax basis, including $1.2 billion for the final payment relating to the 2012 Department of Justice settlement. The group’s operating cash flow excluding the Gulf of Mexico payments came in at $5.4 billion, including a $1.8-billion negative impact from an increase in working capital.
Analysts weigh in on results
The spill payment in the first quarter was "$500 million more than I expected,” although that probably means the burden will be lower later this year, said Redburn analyst Rob West, as quoted by Bloomberg. “Cash flow was good but messy, with less cash tax paid than expected."