BP PLC (LSE:BP.) reported a substantial decline in profits for the third quarter, falling short of analysts' expectations and wiping more than £4 billion off the company's market value.
Shares of BP plunged by 4% in early trading following the announcement. The company recorded an underlying replacement cost profit — a measure akin to net profit — of US$3.293 billion, down from US$8.15 billion year-on-year. Analysts had anticipated a profit figure of US$4.059 billion for the quarter.
Despite an uptick in oil and gas production and higher refining margins, the energy giant was hampered by a weak performance in gas marketing and trading. BP also incurred impairment charges totalling US$1.2 billion, including a pre-tax charge of US$540 million related to US offshore wind projects.
Capital expenditure for the quarter stood at US$3.6 billion, a decline from the previous quarter's US$4.3 billion. However, operating cash flow improved both quarterly and year-on-year to reach US$8.747 billion.
BP has announced a US$1.5 billion share buyback ahead of its fourth-quarter results.
At 8.32 am, the shares were down 22p at 504.48p.