News that BP (BP.) had posted a modest profit as opposed to the loss which had been pencilled in by analysts helped lift the shares 1.9% to 203.85p.
Underlying replacement cost profit, its definition of net income, was $86 million. That was down from $2.2 billion a year earlier, but an improvement on its second-quarter loss of $6.7 billion as the level of write-offs fell and as pricing and demand in the oil and gas markets improved slightly.
BP said it expected its headcount to reduce by around 10,000 positions, with headcount down by 2,800 for the year so far.
Year-on-year the quarterly dividend was down 48.8% to 5.25 cents per share, though this was in line with the level the dividend had been rebased to earlier in 2020.
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AJ Bell investment director Russ Mould commented: ‘Better than forecast numbers from oil major BP are just as much an indication of how low expectations had fallen ahead of its third quarter update as a sign of tangible green shoots for the company’s recovery.
‘While better than the loss which had been pencilled in and a big improvement on the record loss posted for the second quarter, the uncomfortable truth is a huge amount of manpower, resources and effort was put into achieving a profit of less than $100 million.’
Mould added: ‘BP faces the challenge of investing in a transition to a cleaner, greener future while keeping its balance sheet under control and maintaining dividend payments.
‘There still seems to be healthy scepticism in the market about CEO Bernard Looney’s pledge to keep “performing while transforming”. Sooner or later it feels like something has to give and it seems likely the dividend will remain in question as far as investors are concerned for the foreseeable future.’
