BP has reported third-quarter net profit of $1.62 billion, trouncing consensus expectations of $686 million, but still only delivering around half of last year's result for the period. This as the oil major sliced spending by another $1 billion dollars as the hit from weaker oil prices continued to bite. The company warned industry refining margins will continue to be under pressure in the fourth quarter yet despite this, the oil major says it expects a slight improvement in the final quarter of the year. Underlying replacement cost profit, the actual metric that BP use for net income, came in at $933 million for the quarter, compared with $1.8 billion a year ago. Brian Gilvary, BP's chief financial officer said in the company's press release: "We continue to make good progress in adapting to the challenging price and margin environment. We remain on track to rebalance organic cash flows next year at $50 to $55 a barrel, underpinned by continued strong operating reliability and momentum in resetting costs and capital spending." "At the same time we are investing in the projects, businesses and options to deliver growth in the years ahead," the statement added. Weakness was centered around BP's upstream operations which reported an underlying pre-tax loss compared to profits in both the second quarter of 2016 and this period a year ago. The company pointed to weaker oil and non-U.S. gas prices and lower gas marketing and trading as responsible for the decline. The contribution from Russia's Rosneft, from which BP receives a 35 percent share of net income for its stake remained positive but came in less than a third of the third quarter 2015 figure. Production for the quarter was in line with the consensus figure of 2.11 million barrels of oil equivalent per day while net debt at the British oil and gas major rose to $32.4 billion versus $25.6 billion a year ago. Earnings per share of 8.56 cents came in far ahead of broker estimates of 3.31 cents and BP is set to maintain its dividend at 10 cents per share. Shares fell 1.3 percent as the European session opened on Tuesday. Source: CNBC
