BP posts sharply higher third-quarter profits on high oil prices

Tuesday, October 26th 2004, 9:18 am
By: News On 6

LONDON (AP) _ High oil and gas prices and bigger profit margins in refining helped the British energy giant BP PLC nearly double its third-quarter earnings.

BP said Tuesday it earned $4.48 billion for the three months ending Sept. 30, up from $2.34 billion for the same period a year ago. Revenues rose to $73.85 billion from $59.16 billion a year ago.

``This has been another strong performance against the backdrop of strong global demand,'' said BP chief executive John Browne.

The company said the loss of production in the United States following Hurricane Ivan, low inventories and limited spare capacity had underpinned the rising price of crude.

Excluding stock holding gains for the period, BP reported what it calls a replacement cost profit of $3.46 billion for the quarter, up from $2.26 billion a year earlier. BP said the replacement cost result strips out fluctuations in the value of stock holdings, and hence gives a better picture of BP's current financial position.

BP also reported a pro forma net profit, which it said excludes losses or gains from the sale of assets or termination of operations, of $3.94 billion, up 43 percent from $2.76 billion a year ago. That was lower than analysts expected.

Profits from exploration and production increased 30 percent as BP reaped further benefits from its association with Russian oil group TNK.

Refining margins slipped from record levels in the second quarter, but remained high due to strong growth in demand and low stocks, BP said.

The outlook for the rest of 2004 will depend on how quickly U.S. production recovers after Hurricane Ivan and the strength of oil demand growth, Browne said.

For the first nine months of the year, BP reported a profit of $13.2 billion, up from $8.15 billion a year earlier. Nine-month revenue came to $214.49 billion, up from $176.38 billion.