BP reported its much better-than-expected first quarter results, which pleased the investors and helped the oil giant’s shares soar to its 2016 high.
The adjusted profits came in unexpectedly at $532 million while the analysts had predicted a loss of $140 million. The aggressive cost cutting plans had helped the company to prevent loss amid the oil price crisis. BP was also able to maintain its dividend payout at 10 cents per share.
Despite the upbeat results, it is still an 80% decline in profits compared to a year earlier. In the first quarter, BP made its payments of $1.1 billion for its role in the disastrous Deepwater Horizon oil spill which killed 11 people and destroyed the area’s ecosystem in April 2010.
BP said to prepare for more cost cutting in case of continued sliding oil prices. The company had reduced its spending three times to $19 billion in 2015. However, its CEO Bob Dudley was optimistic about an oil price recovery at the end of 2016. “Market fundamentals continue to suggest that the combination of robust demand and weak supply growth will move global oil markets closer into balance by the end of the year,” said Mr. Dudley, according to the Guardian.
Sentifi signaled the increasing buzz around BP on Tuesday with more than 3,900 voices talking about its financial results and cost cutting.
Jim Cramer commented on the event that BP’s better-than-expected results had sent a message to oil companies that refining and marketing should not be split up in this downturn of the oil sector.
Global oil firms have been experiencing a challenging period for oil and gas in the last three decades. According to the New York Times, nearly every oil and gas company has been downgraded lately. Exxon Mobil is the latest oil giant being stripped of Standard & Poor’s top credit rating. “It shows you low oil prices humble even the mighty,” said Oppenheimer senior oil analyst Fadel Gheit.
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