27th October 2015
BP’s profits for the third quarter were $1.8bn (£1.2bn) on an underlying basis.
This was down $3bn from a year earlier due to lower oil prices and charges relating to a 2010 spill, however it was higher than analysts had predicted.
BP shares opened nearly 2% higher, but was down 1% on the day during afternoon trading.
Ian Forrest, Investment Research Analyst at The Share Centre, says it is still tipped as a ‘buy’ for investors: “This morning, oil giant BP reported that profits were lower in Q3, as it continues to battle with lower oil prices and charges related to the 2010 Gulf of Mexico oil spill. However, investors should acknowledge that the group targets a balanced cash flow of around $60 a barrel and a sustainable dividend, which aims to grow distributions over the long-term following a slump in Q3.
“BP is the first of the world’s five largest non-state owned oil companies to announce earnings for the period, with the rest scheduled to report results later this week. Conditions and margins in the refining industry have improved following excess capacity issues a few years ago, and they are helping to mitigate upstream difficulties.
“We continue to recommend BP as a ‘buy’ for investors willing to take on an intermediate level of risk, while looking for capital growth and income. With a p/e multiple of roughly 9 times, it rates favourably against its peers. However, the uncertainty over the price of oil increases the risk for all oil companies, therefore investors may wish to drip-feed into the stock.”