BP. Bp Plc

By Giulia Petroni

BP PLC (BP.LN) reported results for the third quarter on Tuesday. Here is how the results came in:

UNDERLYING REPLACEMENT COST PROFIT: BP's underlying replacement cost profit--a figure similar to the net profit figure U.S. oil companies use, but excluding one-off items--came in at $2.25 billion. While below the $3.84 billion reported in the third quarter of 2018, it beat forecasts. A company-compiled consensus of 24 brokers' estimates projected underlying replacement cost profit at $1.73 billion.

UPSTREAM PRODUCTION: Upstream was weaker than expected despite a rise in production, Bernstein says. Upstream production for the quarter rose 4.4% to 2.57 million barrels of oil equivalent a day. However, underlying replacement cost profit before interest and tax in the business fell to $2.14 billion from $4 billion. BP said earnings were hit by weaker oil prices, maintenance activities in some of the highest-margin regions and weather in the Gulf of Mexico.

WHAT WE WATCHED:

STRONG DOWNSTREAM: BP delivered better-than-expected downstream revenues, according to CMC Markets, with underlying replacement cost profit before interest and tax at $1.88 million. The outperfomance was helped by record output at the Whiting and Cherry Point refineries in the U.S, analysts say, and helped offset weaker upstream performance.

NET DEBT ON THE RISE: Net debt in the quarter rose to $46.5 billion compared with $38.5 billion the year-earlier period. Gearing ticked higher to 31.7% from 27.1% the previous year----above BP's target of 20%-30%--following guided divestment-related impairments. In a note, CMC Markets analysts said they believe management has already taken steps to address debt levels with the sale of BP's Alaska business to Hilcorp for $5.6 billion.

DIVESTMENTS AHEAD OF SCHEDULE: Following the agreement to sell all BP's interests in Alaska, divestment transactions announced in 2019 totaled $7.2 billion at the end of the third quarter. BP expects to complete its $10 billion divestment program by the end of 2019, earlier than previously expected.

Write to Giulia Petroni at giulia.petroni@wsj.com

(END) Dow Jones Newswires

October 29, 2019 05:32 ET (09:32 GMT)

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