BP share price rallies on better-than-feared Q1 results
Shares in BP (LON:BP) have rallied in London this morning after the company’s first-quarter results were better than analysts had feared, while the oil major maintained its payout to shareholders. The FTSE 100 group, whose performance has been hit by the ongoing oil price weakness, said that it could cut its capital spending further.
As of 09:01 BST, BP’s share price had soared 3.07 percent to 371.40p, outperforming the benchmark FTSE 100 index which currently stands 0.52 percent higher at 6,293.41 points. The group’s shares have gained nearly five percent in the year-to-date, as compared with a 0.82-percent rise in the Footsie.
BP announced in a statement today that it had slipped to a first-quarter replacement cost loss of $485 million (£334 million), as compared with a profit of $2.1 billion (£1.4 billion) a year ago. Following adjustments for a net charge for non-operating items of $778 million and net unfavourable fair value accounting effects of $239 million, however, the company reported a replacement cost profit of $532 million, beating analyst expectations for a loss.
“The company is showing it is restructuring and reducing costs to adjust to oil prices and that’s pleasing,” Brendan Warn, a managing director at BMO Capital Markets, told Bloomberg. “Higher-than-expected downstream earnings helped it beat estimates this quarter.”
BP, whose fortunes have been hit by the oil price rout, also said that it would pay a quarterly dividend of 10.00 cents per ordinary share. Going forward, the oil major added that it expected its capital expenditure to come in around $17 billion this year, at the lower end of its previous guidance, and that “in the event of continued low oil prices” it saw further flexibility to lower spending to between $15 and $17 billion next year.
Chief executive Bob Dudley, however, noted that he expected crude prices to recover.
“Market fundamentals continue to suggest that the combination of robust demand and weak supply growth will move global oil markets closer into balance by the end of the year,” he pointed out in the statement.
Blue-chip peer Royal Dutch Shell (LON:RDSA) will post first-quarter results on May 4.
As of 09:22 BST, Tuesday, 26 April, BP plc share price is 371.55p.
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