A steep run-up in oil prices and cost-cutting measures helped increase
earnings more than threefold, handily beating Wall Street's expectations by nearly 6 cents a share.
Based in London, BP Amoco, the world's third-largest publicly traded oil company, reported first quarter earnings of $2.71 billion, or 83.58 cents a share, compared with $761 million, or 23.58 cents a share in the year-ago period. Wall Street had expected earnings of 78 cents a share.
Shares of BP Amoco, however, fell 2, or 4%, to 53 1/8. The decline followed several days of sharp gains. (BP Amoco closed down 1 15/16, or 4%, at 53 3/16.)
"The result reflects stronger oil and gas prices and improved refining margins along with continued performance improvements in all our businesses," BP Amoco said in a statement.
Some of the biggest oil companies reported a windfall quarter as oil prices reached a nine-year high of $34 a barrel in March. Crude oil has since fallen to about $27 a barrel.
James van Alen, an analyst at
Janney Montgomery Scott
, said strong performance in BP Amoco's refining and marketing businesses, in addition to exploration and production, also helped to strengthen the company's performance.
He noted, however, that favorable tax rates, which would not be applicable in future quarters, also contributed to the company's net earnings.
"We had estimated earnings of 80 cents and they came in at 84, but they had a special tax credits, which probably won't be repeated," said van Alen, who noted that the company was taxed at a rate of 25.1%, below his expectations of 28%.
Janney Montgomery Scott has not done any underwriting for BP Amoco. Van Alen rates the company an accumulate.
, a company acquired by BP Amoco in April, reported net earnings of $583 million, or $1.77 a diluted share, compared with $172 million, or 53 cents a diluted share a year earlier.
After adjusting for the earnings from the company's Alaskan assets, which have been sold, Arco's earnings were $332 million, or $1.10 a diluted share, compared with $141 million, or 43 cents a diluted share, in the year-earlier period.
Separately, BP Amoco said it expected its annual gas output to rise to 8 billion cubic feet a day by the end of 2000 and to 9 billion cubic feet by the end of the following year, from 6 billion cubic feet a day currently.