Earnings Preview: BP Q3 earnings seen falling

posted: 31 DAYS 7 HOURS AGO

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LONDON -BP PLC is expected to report lower third-quarter earnings before London's financial markets open Tuesday. The following is a summary of key developments and analyst opinion for the period.

OVERVIEW: BP is expected to report significantly lower earnings for the third quarter compared to a year ago. The reasons: oil prices have dropped to $68 barrel compared to $115 a barrel last year, natural gas has fallen to $3.40 per million cubic feet compared to $10.25 last year, and BP's Global Indicator Margin fell to $3.42 from $8.03 per barrel a year ago.

BY THE NUMBERS: The consensus is that BP will report net income of $3.15 billion and will maintain the quarterly dividend at 14 cents.

ANALYST TAKE: Seymour Pierce in London expects BP to beat the consensus with a net income of $3.65 billion, down 54 percent from the $8.0 billion reported in Q3 2008.

WHAT'S AHEAD: Carl-Henric Svanberg, 57, chairman of Swedish telecoms company Ericsson, will take over as chairman in January. In an interview published last week in The Sunday Times, Svanberg said he intends to shake up the board, among other things. "There is probably more change in the years to come than maybe we have seen in the past," he said. "Oil consumption is going to show a different pattern from the one we have seen in the past and new technologies are needed to reach new wells," the newspaper quoted him as saying.

In September, BP announced a major discovery in the Gulf of Mexico where it is the largest oil and gas producer. It said the well, one of the deepest ever drilled, reached a pool of oil big enough to supply U.S. consumption for nearly one year, but the amount which can actually be extracted has yet to be determined.

STOCK PERFORMANCE: BP shares closed Friday at 569 pence, up 19 percent from 478 pence on June 30. Shares hit a one-year high of 574.2 pence on Oct. 19.

2009-10-26 10:13:27