Oil giant BP Plc broke a near-two-year run of record quarterly earnings yesterday but soothed investors with an unexpected dividend hike and a reassurance on output growth targets.
The world's third-largest oil group reported a seven per cent fall in adjusted net profit between the first and second quarters, ending a seven-quarter run of record results.
Replacement cost net profits adjusted to exclude goodwill amortisation from acquisitions was $3.799 billion, up from $3.61 billion a year earlier and in line with forecasts. Lower oil and gas prices meant the result was down from the record $4.13 billion in the first quarter.
But thanks to the dividend hike and confirmation that output targets are on track, BP's stock closed up 2.6 percent at 591 pence, and traders noted some switching out of shares in rival Shell, down 1.2 percent at 559p, which last week cast doubt on its own production growth plans.
BP's results coincided with figures from Norway's Statoil, which like Shell said it was struggling to keep output up. "BP is managing to do what the rest of the sector has failed to do -- that is deliver its production growth targets," said analyst Doug Leggate of Commerzbank.
BP, like its fellows in the industry, is pulling in more cash than it can spend on viable projects as oil prices stay close to 10-year highs.