Earnings Jump at BP - TheStreet

Earnings Jump at BP

Year-over-year revenue declines.
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(BP) - Get Report

said Tuesday that its sale of a pipeline and a refinery in the second quarter of 2007 helped boost its quarterly profits year over year.

The company earned $7.38 billion, or roughly 32 cents a share, compared with $4.66 billion, or 30 cents a share, during the same period a year earlier.

On an American depositary share basis, BP made $1.90 in the second quarter, 8 cents above last year and well ahead of the consensus of $1.62 that was forecast by Thomson Financial.

BP generated $71.9 billion in revenue last quarter, 17% higher than the first quarter but down fractionally from a year ago.

The company's exploration and production division earned $6.89 billion in the quarter, before interest and taxes, down from $7.83 billion in the 2006 period. In a press statement, the company blamed lower production volumes and higher costs for the year-on-year decline.

BP produced 3.8 billion barrels of oil equivalent during the quarter, which was 5% lower than its production during the second quarter of 2006.

Earnings from the company's refining and marketing segment, after adjusting for the sale of the Coryton refinery and the U.S. West Texas pipeline, were slightly lower than the $3 billion earned last year.

However, the second quarter's results were significantly stronger than the $1.1 billion recorded in the first quarter of this year, owing to improved refining margins.

"Frankly, our financial performance is not good enough," CEO Tony Hayward said in an investor conference call. He added that the best way of restoring BP's financial results was to improve its operational performance.

BP has been hit by refinery outages in the U.S. and delayed upstream projects around the globe, Hayward said.

Still, the company wasn't without its successes during the second quarter. A new drilling project in Oman could yield 30 trillion cubic feet of natural gas, and a new exploratory project in Libya will be the largest ever pursued by the company, according to Hayward.

Late in the trading session, shares of BP were 2.3% lower at $72.69.