BP Profit Falls on Lower Output, Taxes

Sales are 22% higher.
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A 23% rise in sales didn't translate into earnings growth at

BP

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, as lower production and a high tax bill ate into the energy supermajor's bottom line.

BP earned $5.6 billion in the quarter, down from $6.6 billion a year ago. Adjusted for special items and inventory effects, BP earned $5.3 billion on a "replacement cost" basis in the quarter, down from $5.5 billion a year ago. Sales were $67.1 billion, compared with $54.7 billion.

Higher prices drove the rise in revenue as BP's production actually fell in the first quarter compared with a year ago. The company produced an average of 4.035 million barrels of oil equivalent a day in the January to March period, compared with 4.101 million a year ago.

A number of issues plagued production, including the closure of BP's massive Mars platform in the Gulf of Mexico and a refinery in Texas City, Texas. Both were casualties of last summer's hurricane season, with the latter also the site of an explosion that killed 15 people.

Also weighing on profit was a higher tax bill. BP's first-quarter tax provision jumped 18% from a year ago to $2.9 billion, in part because of higher payments in Russia.

Shares fell 17 cents to $75.65 on Instinet Tuesday.