29 October 2002 – Oil giant BP today posted third quarter results showing a sharp decline in earnings which sent oil shares down.
For nine months the result was a $6.0bn profit compared to $9.8bn for the period last year. The drop in profitability was cushioned by the sale of BP’s interest in Ruhrgas.
The stock market reacted badly to results and forecast drop in its full-year oil and gas output forecast for the third time in less than two months. BP shares fell 6 per cent by mid-morning to 397p, the first time the stock has slipped below £4 for four years.
BP’s earnings fell 13 per cent during the July to September period and its net profits came in at about $3bn £2bn) – well below analysts’ expectations.
“The current environment has little upside and significant downside risks,” said chief executive Lord Browne. BP now expects output to grow by just 3 per cent this year, below its 5.5 per cent long-term target.
In gas, power and renewables, the results reflected poorer marketing and trading conditions.
Oil industry shares slipped across the board because of fears that BP’s rivals Royal Dutch Shell and Exxon Mobil will reveal similar difficulties when they reveal their latest financial figures later this week.
Byron Grote, currently in charge of BP’s Asian interests. is to replace BP’s current CFO John Buchanan when he retires next month.