Friday, October 29, 2010

BP Plc (NYSE: BP): Q3 Earnings Preview 2010

BP Plc (NYSE: BP) is scheduled to release its third quarter earnings before the opening bell on Tuesday, November 2, 2010. Analysts, on average, expect the company to report adjusted earnings of $1.53 per share on revenue of $72.46 billion. In the year ago period, the company reported earnings of $1.50 per share on revenue of $67.86 billion.

BP Plc provides fuel for transportation, energy for heat and light, retail services, and petrochemicals products. The company operates through two segments: Exploration and Production, and Refining and Marketing.

In the preceding second quarter, the London, United Kingdom-based company's net loss was $17.15 billion, $5.42 per share, compared to a profit of $4.38 billion, or $1.01 per share, in the year-ago quarter. The company set aside $32.2 billion for costs related to the spill, including $20 billion for an escrow fund announced earlier. Adjusted profit rose to $5 billion from $2.9 billion in the same quarter last year. Revenue increased to $75.87 billion from $56.56 billion in the same quarter last year. 

BP is working hard to rebuild its shattered reputation. The company has been divesting assets to cover costs linked to the Gulf of Mexico oil spill, the worst in U.S. history. At its last earnings call in July, the company also announced its plans to sell assets for up to $30 billion over the next 18 months, primarily in the upstream business. So far, it has sold nearly $11.5 billion worth of assets including the $7 billion sale of onshore gas assets in the U.S., Canada and Egypt to Apache Corp. Earlier this month, Bob Dudley commented that the company is trying to reduce the number of operatorships it holds in the Gulf of Mexico. 

Late in July, the company said that a probe by U.S. Attorney General Eric Holder may lead to suspension of well operating licenses and debarment from government contracts under U.S. pollution law. The ruling will determine the size of the fine under the Clean Water Act, which could run as high as $20 billion.

Bob Dudley, who became BP CEO on October 1, has unveiled a reorganization of BP’s business, announcing the departure of the head of the exploration and production unit, Andy Inglis, and splitting it into three. He also established an independent safety division. Meanwile, the stock has recovered 42 percent since June 29 when it touched a 14-year low of 302 pence in London trading.

BP is likely to benefit from higher crude oil prices. The price of crude in New York trading has gained 10 percent since the end of May to $81 a barrel. Dudley recenty said that if oil prices stay high, the company's performance remains strong and it satisfies obligations from the spill, then BP will be "heading in the right direction" to restore some level of dividend payout. 

Recently, a US Presidential panel appointed to probe the rig blast that led to the spill said  that its contractor Halliburton Co. (NYSE: HAL) knew the cement it was using to seal the oil well in the Gulf of Mexico was unstable. 

Full Disclosure: None.
Related Posts with Thumbnails

Wikinvest Wire