BP Second-Quarter Sales, Earnings Beat Forecasts

Oil and gas production company BP (BP. BP.L) posted a decline in earnings which nevertheless beat analysts’ forecasts as oil prices declined and production advanced.

Sales and other operating revenues fell to $72.68 billion during the three months that ended June 30 from $75.44 billion a year ago mainly on account of a drop in downstream turnover, the company said in its earnings statement. That result, however, comfortably beat a Capital IQ estimate of $66.67 billion.

Reported oil and gas production averaged 3.8 million barrels a day of oil equivalent in the quarter, a 4% increase from the prior-year period. With the start-up of Culzean in the North Sea this quarter, the company said four upstream “major” projects have begun production in the first half.

Underlying RC profit, the company’s preferred measure of earnings, drifted slightly lower to $0.83 per American Depositary Share (ADS) from $0.85 per ADS a year earlier but handily beat the market forecast of $0.77 per ADS.

BP said that lower year-on-year underlying RC profit was due to a net charge for non-operating items of $861 million, mainly relating to impairment.

“The quarter’s result largely reflected continued good operating performance, offset by oil prices lower than in the second quarter of 2018,” the company said in a statement, which cited Chief Executive Officer Bob Dudley as saying that “at the midpoint of our five-year plan, BP is right on target.”