said Tuesday that fourth-quarter profit jumped 145%, primarily due to a yearlong surge in oil prices.
BP Amoco's fourth-quarter replacement cost profit before exceptional items rose to $2.12 billion from $999 million in the same quarter in 1998.
The 1999 quarterly number includes special charges of $439 million from integration costs, restructuring costs, asset writedowns and project costs, according to the company.
Oil companies often use replacement cost, or operating income, as a more accurate reflection of earnings because the cost of inventory, or oil, varies widely. So the cost of oil is compared with a historic number for continuity.
The London-based company's shares were down 1, or 2%, to 46 7/16 in morning trading Tuesday. (Shares closed up 1/8, 0.26%, to 47 9/16.)
"These were a set of results that were in line with what we expected," said Nick Davies, an analyst at
who rates the stock a buy. "The large percentage gain is primarily because crude prices are so high." Davies' firm has done no recent underwriting for the company, but advised
in its merger with
The price of a barrel of oil
climbed to more than $30 Monday, up significantly from $10 a barrel in the fourth quarter of 1998.
BP Amoco group chief executive Sir John Browne said the strong quarter reflects the continuing improvement in his company's businesses despite a sluggish downstream business, referring to oil refining and marketing and chemicals.
In refining and marketing, replacement cost operating profit dropped 8% to $464 million, after adjusting for special charges of $171 million.
The chemicals business dropped 19% below the same quarter in 1998, to $266 million.
The company said oil prices were likely to be strong in the short term and throughout 2000 as the
Organization of Petroleum Exporting Countries
restrains oil production.
Earlier this year crude oil prices had traded as low as $24.22 a barrel but have surged to more than $30 from supply restraints from OPEC.
Browne would not talk about the halted plan to buy U.S-based
in a conference call Monday with analysts and investors. The
Securities and Exchange Commission
has raised concerns over fair competition over the Northwest assets of Arco.