Updated from 11:48 a.m. EDT
announced Tuesday that its third-quarter net profits fell 29% from the same period a year ago, largely because of lower refining margins -- a developing theme in the industry -- and refinery outages.
The British oil giant earned $4.4 billion in the third quarter, or $1.22 per American depositary share, down from $6.2 billion, or $2.10 per ADS, in the same quarter of 2006. According to a poll conducted by Thomson Financial, analysts were expecting earnings of $1.38 per ADS.
BP reported that it generated $72.6 billion in revenue in the third quarter, compared with $70.7 billion a year earlier, a 4% increase.
The company stated in a press release that its oil and gas production during the third quarter was 3.65 million barrels of oil equivalent a day, about 4% less than it was during the same period a year ago.
BP said realized refining margins were lower in the most recent quarter because of the narrowing differential between refining light crude, which is less expensive, and heavy crude, which is more expensive. It also said its performance was hindered by problems at its Whiting, Ind., refinery during the quarter.
The company announced last week that it had wrapped up a prolonged restructuring program aimed at streamlining its businesses and regaining competitiveness with its peers in the integrated oil space. The program was led by BP's new CEO Tony Hayward.
BP has suffered from a succession of problems over the past few years, including a massive fire at its Texas City, Texas, refinery in 2005 and the
ousting of its former CEO John Browne.
The company also said it will increase dividend payments to 64.95 cents a share next quarter, compared with 58.95 cents a year ago.
Shares of BP were recently trading 1.2% higher at $75.10.
The Wall Street Journal
reported that BP will pay $303 million to settle allegations that it manipulated the U.S. propane market in 2004. The company will also make changes to its compliance operations to defer criminal prosecution, the report said.