ii view: A marathon not a sprint at BP

Oil giant BP reports a loss, but leaves the dividend payment unchanged.

Third-quarter results

• Underlying replacement cost profit down 41% to $2.3 billion
• Charge of $2.6 billion resulted in reported quarterly loss $749 million
• Underlying upstream production down 2.5%
• Net debt flat at £46.5 billion
• Dividend payment unchanged at 10.25 cents per share

Chief executive Bob Dudley said:

"BP delivered strong operating cash flow and underlying earnings in a quarter that saw lower oil and gas prices and significant hurricane impacts. Our focus remains firmly on maintaining financial discipline and delivering safe and reliable operations throughout BP. We're also continuing to advance our strategy, making strong progress with our divestment plans and building exciting new opportunities in fast-growing downstream markets in Asia."

ii round-up:

Oil giant BP (LSE:BP.) operates in over 75 countries across the world. 

Generating sales of nearly $300 billion in 2018, it employs over 70,000 people and produces 3.7 million barrels of oil equivalent per day. Around 1.7 million barrels of oil pass through its refineries daily and it operates over 18,500 retail sites globally. 

For a round-up of these third-quarter results, please click here.

ii view:

Still in recovery from the disastrous 2010 Gulf of Mexico oil spillage, BP continues to navigate a multitude of difficulties and opportunities. Payments for the 2010 spillage are still being made, while the previous acquisition of assets from miner BHP Group (LSE:BHP) has seen debt increase. Factors outside of management's control such as the oil price and geopolitical tensions can also influence performance. 

For investors, shareholder returns remain high on the agenda. Cashflow, bolstered by an ongoing business divestment programme, underpin returns. BP also bought back 34 million shares in the third-quarter. An unchanged dividend payment leaves the historic dividend yield at over 6%. In all, BP continues to justify its place within a balanced and diversified portfolio. 

Positives: 

• Shareholder returns remain a focus
• A reduction in debt is being targeted
• Expects to sell more than $10 billion of assets by the end of 2020
• Growing its low carbon businesses

Negatives:

• Group debt has risen following the acquisition of BHP assets
• Costs in relation to the Gulf of Mexico oil spill are still being suffered
• Subject to factors outside of its control such as geopolitical tensions
• Fossil fuels are linked with climate change

The average rating of stock market analysts:

Strong buy