BP profit outstrips forecasts, lifted by higher oil output

LONDON (Reuters) – A strong increase in oil and gas production helped BP offset weaker crude prices and refining profit to beat second-quarter profit expectations on Tuesday, lifting its shares.
BP’s result contrasts with Total and Norway’s Equinor, which both reported sharp earning drops, and builds on a steady recovery following deep cost cuts since the 2014 downturn, project start-ups and last year’s $10.5 billion acquisition of BHP’s US shale assets.
Shares in BP were up 3 per cent at 0836 GMT, compared with a 0.1 per cent gain in the broader FTSE index. BP and rival Royal Dutch Shell kept the blue-chip index in positive territory.
“At the midpoint of our five-year plan, BP is right on target,” Chief Executive Bob Dudley said in a statement.
BP’s underlying replacement cost profit, the company’s definition of net income, reached $2.8 billion in the second quarter, exceeding a company-provided forecast of $2.46 billion.
The second-quarter profit was up from $2.4 billion in the previous quarter.
The results beat expectations for 10 quarters in a row, analysts at Bernstein said.
“Strong volume growth from accretive barrels and seamless execution remains underappreciated,” said Bernstein, which has an “outperform” recommendation on the stock.
The company’s operating cash flow recovered to $6.8 billion in the quarter from $5.3 billion in the previous quarter as a result of a one-off working capital release.
BP’s dividend remained unchanged at 10.25 cents per share.
— Reuters