Reuters: BP profits at bottom of forecasts: “has outshone scandal-hit rival Royal Dutch/Shell”
Tue 27 July, 2004
By Sudip Kar-Gupta
LONDON (Reuters) - BP has reported second-quarter profit at the bottom end of market forecasts but says it will continue a share buy-back programme that has buoyed investor sentiment.
The world's second-biggest oil group, which has outshone scandal-hit rival Royal Dutch/Shell SHELL this year, said on Tuesday pro-forma net profit for the second quarter rose 23 percent from a year ago to $3.908 billion (2.123 billion pounds).
A range of analyst forecasts had given an average forecast of $4.17 billion, and the stock fell 1.1 percent to 484-1/4 pence in early trade.
BP's earnings, however, were boosted by soaring oil prices and rising production at its new Russian venture. BP said it had achieved a record half-year result, though second-quarter profit was below the first-quarter figure of $4.717 billion.
"This has been another strong performance against the backdrop of a robust trading environment," Chief Executive John Browne said in a statement.
"BP's numbers appeared slightly disappointing, but it remains a very strong performance," said Investec analyst Bruce Evers, who has a "buy" rating on the stock.
DIVIDEND DELIGHT
BP BP.L is the first of the world's top three oil companies to report second-quarter results. Global leader Exxon and Shell, the world's third-largest oil group, report later this week.
Shell's statement in January that it had overbooked oil and gas reserves by 20 percent stunned financial markets, but record oil prices and bumper profits by top oil firms have kept the sector popular.
"The big oil stocks have got defensive merits," said Cavendish Asset Management fund manager Paul Mumford, whose portfolio includes BP and Shell.
BP said it would increase its quarterly dividend to 7.10 cents from 6.75 cents, and added it would continue the share buy-back.
Cheuvreux analyst Peter Hitchens said the dividend increase was higher than expected, and that BP prospects remained good.
"BP's future looks bright," said Hitchens.
http://www.reuters.co.uk/newsPackageArticle.jhtml?type=businessNews&storyID=554409§ion=finance