THE WALL STREET JOURNAL: BP's Net Rises 34% On Higher Oil Prices: "Other companies reporting in coming days may be even harder hit, including No. 3 Royal Dutch Shell PLC, the Gulf's biggest producer.": Tuesday 25 October 2005

LONDON - BP PLC said its third-quarter earnings rose 34% as soaring petroleum prices and refining margins cushioned the impact of repair costs and lost oil and natural-gas production from Hurricanes Katrina and Rita. 

BP, the world's second-largest publicly traded oil company by market capitalization behind Exxon Mobil Corp., said its net profit rose to $6.46 billion, or 31 cents a share, from $4.82 billion, or 22 cents a share, a year earlier. Revenue for the quarter was $97.73 billion, up from $66.73 billion the year before.

The profit included net special charges of $921 million, compared with a year-earlier charge of $394 million. This quarter's special charges included a re-measurement of fair value for assets associated with BP's Innovene chemical subsidiary, which it has previously agreed to sell. Other special items included a $100 million impairment for hurricane damage to a Gulf of Mexico field, which BP said is still being assessed.

MORE ON EARNINGS
 

 

Read up on major companies still to report in this autumn's earnings season.

BP reports in accordance with International Financial Reporting Standards, which differ from U.S. generally accepted accounting principles.

BP is the first of the so-called majors -- large Western energy companies that do everything from finding and refining oil to running gasoline stations -- to report third-quarter earnings.

Enjoying sky-high oil prices even before Hurricane Katrina and Rita but having few opportunities for big acquisitions, BP and others have cheered investors with a string of big quarterly profit increases, massive share-buyback programs and big boosts in dividends.

But BP and other majors were hit hard by the two Gulf of Mexico storms, which shut down oil and natural gas production, damaged facilities like production platforms and refineries and disrupted the companies' ability to transport and sell oil products. BP said Tuesday that production in the quarter was down 2% from the same period last year, to 3.82 million barrels of oil equivalent a day, largely because of the storms.

Other companies reporting in coming days may be even harder hit, including No. 3 Royal Dutch Shell PLC, the Gulf's biggest producer.

Despite the heady profits, pressures on the bottom line have been growing for Big Oil. Costs for everything from drilling rigs and workers to steel have sky-rocketed. And oil prices have moderated significantly in the current quarter since peaking at above $70 a barrel immediately after Hurricane Katrina. Still, at just under $60 for a barrel of U.S. benchmark crude, oil is more than 40% above its average price last year. 

In early trading in London, BP was down 8.5 pence, or 1.4%, at 608 pence apiece.

Write to Chip Cummins at chip.cummins@wsj.com