[an error occurred while processing this directive]
BBC News
watch One-Minute World News
Last Updated: Tuesday, 10 February, 2004, 13:01 GMT
Investors downbeat on BP profits
BP petrol station
Investors are shunning oil shares for so-called recovery stocks
Shares in oil giant BP have slipped after the company unveiled disappointing earnings figures.

The firm reported worse-than-expected net profits for the October to December period of $2.667bn (1.427bn).

The company's core oil and gas exploration and production division, which produces the bulk of profits, was surprisingly weak, analysts said.

However, higher crude oil prices still enabled BP to deliver record annual profits, up 42% to $12.4bn.

But investors focused mostly on the fourth-quarter figues, and BP shares closed down 10.75p at 416p.Sector woes

Despite the bumper full-year profits, the oil and gas sector has been a weak performer recently, largely due to concerns about rising costs and investors' preference for recovery stocks.

It looks as if profitability in exploration and production has been very low
Tony Alves, Investec

BP's poor final quarter performance underlines investor disaffection in the sector after its main European rival, Royal Dutch Shell, unnerved shareholders last month with news it would slash its estimated reserves.

BP said that at its exploration and production business, higher oil and gas prices and the contribution of its new Russia venture - TNK-BP - were offset by higher depreciation, foreign exchange effects and one-off charges

Tony Alves, an analyst with Investec, said: "It looks as if profitability in exploration and production has been very low. Other areas are disappointing too."

Dollar weakness

BP said that it intended to resume share buybacks to support its shares in the current quarter.

The firm added that it was raising its fourth-quarter dividend to 6.75 cents a share from 6.5 cents in the third quarter and 6.25 cents a year ago.

However, dollar weakness meant that for shareholders whose payouts are made in sterling, the annual payout would be down 0.8%.

Separately, BP said it would sell its 2.1% stake in Hong Kong-listed Chinese oil producer Sinopec through a public placing of shares.

Shell shares dive as reserves cut
09 Jan 04  |  Business
BP profits disappoint
28 Oct 03  |  Business
BP raises Russian hopes
17 Oct 03  |  Business
BP completes Russia deal
29 Aug 03  |  Business
Report highlights BP failings
18 Aug 03  |  Scotland
EU investigates oil giants
12 Jun 03  |  Business

The BBC is not responsible for the content of external internet sites


News Front Page | Africa | Americas | Asia-Pacific | Europe | Middle East | South Asia
UK | Business | Entertainment | Science/Nature | Technology | Health
Have Your Say | In Pictures | Week at a Glance | Country Profiles | In Depth | Programmes
Americas Africa Europe Middle East South Asia Asia Pacific