BP Slides on Earnings Miss

The oil company's fourth-quarter earnings of 72 cents a share fall far short of analysts' estimates.
By Meredith Derby ,

Shares of

BP

(BP) - Get Report

were falling in premarket trading after the company reported that fourth-quarter earnings missed analysts' consensus estimates.

The company cited weakness in its European unit and weaker refining and retail margins compared with the third quarter. On an earnings-per-share basis, the company earned 72 cents, which fell short of the analyst consensus of 84 cents.

The stock was recently off $1.81, or 3.7%, at $46.59 in preopen trade.

On a pro forma basis, the company earned $2.67 billion in the quarter, compared with $2.64 billion a year ago. The pro forma result is replacement cost profit before items, but excludes acquisition amortization, the London-based company said.

"The world economy recovered in the fourth quarter. Growth was robust in the USA and in Asia, particularly China, but Europe continued to lag," the company said in a statement. "The U.S. and Asia are expected to continue growing above trend in 2004 but European growth is expected to remain below trend, with the exception of the U.K."

BP also said that weak petrochemical margins from high feedstock costs have carried over into the first quarter. But the company expects margins and sales to improve in 2004, reflecting modest increases in industry utilization rates.

Capital expenditures are anticipated to be about $13.5 billion in 2004. Production capacity is expected to grow to more than 4 million barrels of oil per day in 2004, which would be an increase of about 10% from 2003 output.

Analysts are calling for a profit of 98 cents a share in the first quarter.

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