BP's (BP) third-quarter profit almost halved on weaker oil prices and a lower refining margin, with the fall contained by tax credits and continued cost cutting.
The company's shares were recently down 2.9% at 469.90 pence, as net debt swelled and cash flows shriveled, even though the headline earnings figure beat the consensus expectation.
"We continue to make good progress in adapting to the challenging price and margin environment," said BP CFO Brian Gilvary in a statement. "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 underlying replacement cost profit, which excludes inventory valuation effects, fell to $933 million in the third quarter, down from $1.82 billion a year ago. The consensus forecast had been for a $600 million profit. Earnings per share for the quarter was just under 5 cents, also well ahead of estimates. BP held the dividend unchanged at 10 cents a share.
BP's earnings decline continues a grim quarterly reporting season for major European oil companies, which have seen profit fall along with the price of crude. Brent crude traded at an average of $45.90 in the third quarter, marginally higher than the previous quarter's price but down on the average of $50.50 in the third quarter of 2015.
Shell on Tuesday presented the only bright spot in the current round of results after it posted an 18% increase in quarterly earnings after output was boosted by its acquisition of BG.