BP (BP) reported better-than-expected underlying profits in the third quarter, but its shares fell hard in London as investors counted the cost of consecutive quarterly earnings declines.

BP said its third-quarter replacement cost earnings came in at $933 million for the three months ending in September, well ahead of the market's forecast of $780 million but down 49% from the $1.8 billion recorded in the third quarter of 2015, owing to a weaker price environment. The decline markets the ninth consecutive quarter that BP's earnings have fallen from the previous period. 

BP shares traded 2% lower in London following the report, changing hands at 474.8 pence each. The stock has, however, gained 33% since the start of the year. 

"We continue to make good progress in adapting to the challenging price and margin environment," said CFO Brian Gilvary. "We remain on track to rebalance organic cash flows next year at $50 to $55 a barrel, underpinned by continued strong operating reliability and momentum in resetting costs and capital spending."

BP said Brent crude prices averaged $46 per barrel in the three month period, down from $50 a barrel in the third quarter of 2015.

Cost cutting will likely define the group's activities in the near term, as well, as BP revised its 2016 capital expenditure guidance to $16 billion from between $17 billion and $19 billion. Capex in 2017, however, was kept in the $15 billion to $17 billion range. 

Operating cash flow for the period, the company said, was $4.8 billion. The company also confirmed a dividend of 10 cents per share.

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