BP says no decision yet on 2019 dividend hike
FILE PHOTO: The logo of BP is seen at a petrol station in Kloten, Switzerland October 3, 2017. REUTERS/Arnd Wiegmann
By Ron Bousso
LONDON (Reuters) - BP has yet to decide whether to boost its dividend by the end of the year, it said on Wednesday, after its shares fell sharply on the previous day on fears it would defer a decision to 2020.
BP reported a 40% drop in third-quarter profits on Tuesday due to lower oil and gas prices, though its underlying performance and cashflow was strong.
Its shares, however, sank 3.8% after Chief Financial Officer Brian Gilvary indicated in an analyst call that the company could delay a decision on boosting dividends to next year.
"We'll certainly discuss it at 4Q, but it's more likely it will be beyond that," Gilvary said.
Investors have been piling pressure on oil companies to increase returns as they successfully slashed costs after years of weak performance in the wake of the 2014 industry downturn.
BP shares were up 1% at 1110 GMT.
On Wednesday, BP issued an unusual statement saying no decision has been made yet.
"In response to certain commentary following BP's 3Q 2019 results issued on 29 October 2019, BP wishes to confirm that no decision has yet been made with respect to the 4Q 2019 or any future dividend."
In a sign of confidence, BP eliminated a scrip dividend for the quarter which allows investors to get shares instead of cash, a measure used during the industry downturn.
Jefferies analyst Jason Gammel said he had expected the London-based company to increase its dividend by a "modest" 2.4% in the fourth quarter of 2019.
"A 3.8% drop in share price on a stock now yielding 6.5% strikes us as harsh. The company has taken other steps to increasing shareholder returns," Gammel said in a note.
(GRAPHIC: BP Q3 profits - https://fingfx.thomsonreuters.com/gfx/ce/7/7111/7093/Pasted%20Image.jpg )
(Reporting by Ron Bousso, editing by Louise Heavens)
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- Ball Corporation (BALL) Raises Dividend, Enters 40M Share Buyback, Announces Management Changes
- Employers Holdings (EIG) Raises Quarterly Dividend 7.1% to $0.30; 2.8% Yield
- MGIC Investment (MTG) Announces $750M Share Buyback, Declares $0.115 Dividend
Create E-mail Alert Related Categories
Dividends, General News, ReutersRelated Entities
Jefferies & Co, DividendSign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!