Jul 31, 2018

BP hits ‘sweet spot’ as profits rise fourfold

BP said higher oil prices and increasing production led to a fourfold rise in profits that narrowly surpassed expectations. Analysts had forecast just under $2.7bn. Brian Gilvary, chief financial officer, said higher oil prices helped to boost cash generation while BP was also keeping spending in check and reducing debt levels. Investors have been waiting for bigger returns in the form of dividends and buybacks amid a resurgence of profitability and BP raised its dividend for the first time in four years - to 10.25 cents a share - while announcing a $6bn share buyback. BP would only pursue further deals if they allowed the company to maintain debt levels as well as capital expenditure around $15bn a year, he said. This helped boost exploration and production division profits from $710m last year to $3.5bn. That, alongside a higher oil price, lifted operating cash flow - excluding payments related to the Gulf of Mexico spill and including working capital - to $7bn, up from $6.9bn a year ago.

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