Canaccord Genuity Morning Coffee on BP (BP): Stands for "Bad Press"
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Rating Summary:
8 Buy, 8 Hold, 1 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 13 | Down: 25 | New: 24
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Canaccord Genuity Morning Coffee on BP (NYSE: BP): Stands for "Bad Press"
BP posted a sharp fall in second-quarter earnings as it wrote down the value of several key assets in the U.S. by $5 billion. Excluding the one-time costs, analysts said the oil company’s performance was still weak as it continues to suffer the long-term effects of the Deepwater Horizon spill. The British oil group reported adjusted profit of $3.7 billion, compared with $5.7 billion a year ago. The results came in well below analyst estimates of $4.6 billion. In addition to weak U.S. oil and natural gas prices, which has been a headache across all major oil explorers, BP reported a troubling 7.4% drop in production to 2.3 million barrels a day. BP warned its production would be even lower in the third quarter due to seasonal turnrounds, though it would be broadly flat for the year. Another significant drag on profits was from its Russian joint venture, TNK-BP, where net income was $700 million lower than a year ago. In June, BP announced plans to sell its 50% stake in TNKBP and is in talks with both AAR, the consortium that owns the other half, and Rosneft. BP also booked an extra $847 million provision for the 2010 U.S. Gulf oil spill, bringing the total set aside for the disaster to $38 billion. Commenting on the results, CEO Bob Dudley said, "We recognise this was a weak earnings quarter, driven by a combination of factors affecting both the sector and BP specifically. Our extensive turnaround and maintenance program, which will continue into the third quarter, is also affecting some aspects of our near term results.”
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BP posted a sharp fall in second-quarter earnings as it wrote down the value of several key assets in the U.S. by $5 billion. Excluding the one-time costs, analysts said the oil company’s performance was still weak as it continues to suffer the long-term effects of the Deepwater Horizon spill. The British oil group reported adjusted profit of $3.7 billion, compared with $5.7 billion a year ago. The results came in well below analyst estimates of $4.6 billion. In addition to weak U.S. oil and natural gas prices, which has been a headache across all major oil explorers, BP reported a troubling 7.4% drop in production to 2.3 million barrels a day. BP warned its production would be even lower in the third quarter due to seasonal turnrounds, though it would be broadly flat for the year. Another significant drag on profits was from its Russian joint venture, TNK-BP, where net income was $700 million lower than a year ago. In June, BP announced plans to sell its 50% stake in TNKBP and is in talks with both AAR, the consortium that owns the other half, and Rosneft. BP also booked an extra $847 million provision for the 2010 U.S. Gulf oil spill, bringing the total set aside for the disaster to $38 billion. Commenting on the results, CEO Bob Dudley said, "We recognise this was a weak earnings quarter, driven by a combination of factors affecting both the sector and BP specifically. Our extensive turnaround and maintenance program, which will continue into the third quarter, is also affecting some aspects of our near term results.”
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