Fossil Giant BP Sees Fourth-Quarter Profits Sink Nearly 70%
In an announcement expected Tuesday, analysts believe the company will report quarterly profits of £514 million (US$730 million), down from £2.2 billion over the same period last year, due largely to slumping oil prices.
“The full impact of the oil price fall could be much heavier as BP takes one-off write-downs on the value of its reserves,” The Guardian reports. “It may also take further charges connected to the Deepwater Horizon accident from 2011, in which 11 workers died.”
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BP’s profits for the year are expected to come in at US$6.4 billion, less than half the amount for 2014.
In a separate release, Royal Dutch Shell warned its fourth-quarter profits could be cut in half compared to the previous year.
Analysts at Barclay’s said there’s still room for BP to cut costs if oil prices remain in the range of US$40 per barrel. “BP could respond by reducing [capital expenditure] by a further 20% to $14 billion, which would allow management to balance the books by 2018 with the current level of dividend maintained,” the firm wrote. (h/t to Divest Invest for pointing us to this story.)