Updated from 3:03 p.m. EST

Things aren't exactly heating up for the winter at


(BP) - Get Report


Shares of the British oil and natural gas producer fell Tuesday after the company failed to meet Wall Street estimates and pared its 2002 production forecast for the third time in two months.

The London-based company said third-quarter net income rose 78% to $2.8 billion, from $1.6 billion in the same period last year. Excluding one-time items, BP posted a pro forma net profit of $2.3 billion, or 61 cents a share, compared with $2.7 billion, or 71 cents, in the year-ago period. Analysts were expecting the company to report earnings of $2.4 billion, or 64 cents a share, according to research firm Thomson Financial/First Call.

The company also cut its full-year production outlook, saying it expects output to grow 3% in 2002 (the company had been targeting average annual growth of 5.5% through 2005). BP has been steadily lowering growth targets because of a slowdown in operations at its facilities in Alaska, the Rockies, and the North Sea, along with the impact of tropical storms in the Gulf of Mexico.

"Our trading environment has shown little improvement overall and, for the nine months, is well down on a year ago," the company said in a press release. "Performance improvements have been impacted by weaker than expected production."

Roughly three days of oil and gas production in the Gulf of Mexico was lost due to Tropical Storm Isidore. The company produces about 500,000 barrels of oil equivalent per day in the Gulf of Mexico's Continental Shelf and deepwater.

"This time around a lot of that reduction can be attributed to the storms," said Morningstar analyst Paul Larson. "The entire oil refining batch is feeling the effects of Lily and Isidore." Previous reductions were based on more company-specific issues, he said.

Larson said it was hard to predict what further impact a possible war with Iraq might have on the company. "It could be a windfall for the company if prices go up and it doesn't affect supply," he said, adding, "It's really a wild card for them." Larson believes that geopolitical concerns are already reflected in the stock price, which has tumbled 32% since hitting a 52-week high of $53.98 back in April.

The shares closed down 6.8% at $36.78 on the

New York Stock Exchange. The company's disappointing outlook also weighed on a number of other integrated oil companies, including


(XOM) - Get Report

, down 4.1%, and


(CVX) - Get Report

, down 4.7%. The Philadelphia Oil Service Index was lower by 1.9%.