BP beats expectations for third-quarter earnings

The oil producer said it would buy back shares to dilute the impact of its scrip dividend programme

The profit growth was driven by a recovery in earnings from oil and gas production after BP started six major projects so far this year (Getty)

British oil producer BP beat analysts’ expectations for third-quarter earnings on Tuesday and said it would buy back shares to dilute the impact of its scrip dividend programme.

BP reported third-quarter underlying replacement cost profit, the company’s definition of net income, of $1.87bn (£1.42bn), exceeding analysts’ forecasts of $1.58bn.

That doubled a profit of $933m a year earlier and $684m in the second quarter of 2017, when the company took a large writedown on exploration.

BP said it was able to balance its cashflow in the first nine months of the year, excluding large payments for the settlement of the 2010 Deepwater Horizon spill, at $49 a barrel as years of costs cuts pay off.

The profit growth was driven by a recovery in earnings from oil and gas production after BP started six major projects so far this year as well as from the downstream segment where refinery profit margins rose sharply after Hurricane Harvey knocked out around one quarter of the US refining capacity for several weeks.

BP said it will start buying back shares in the fourth quarter, when investors can receive dividend payouts with cash and shares.

“Given the momentum we see across our businesses and our confidence in the outlook for the group’s finances, we will be recommencing a share buyback programme this quarter,” Chief Financial Officer Brian Gilvary said.

Reuters