Oil major BP reported a fall in profits on Tuesday, as the plunging price of oil continues to hit revenues for the sector.
Underlying replacement cost profit -- which takes into account the fluctuations in the price of oil -- came in at $2.577 billion for the first quarter, below the $3.225 billion reported in the same period the previous year. However, it marked an uptick from the $2.239 billion reported in the last quarter of 2014.
The company managed to beat a set of analyst consensus figures provided by the firm, however, which had predicted a replacement cost profit of $1.28 billion. It added that its oil production was 8.3 percent higher than the first quarter of 2014.
BP noted that its upstream operations - which involve oil exploration and production - had weighed on its results, especially its U.S. market, which showed a loss of $545 million for the quarter. It also announced a quarterly dividend of 10 cents per share, to be paid on June 19, and said production for the second quarter was expected to be lower than the first quarter, reflecting significant seasonal turnaround and maintenance activity.
Shares were higher by 1.4 percent in the morning session on Tuesday as Michael Hewson, a chief market analyst at CMC Markets, said that BP had surprised the market by beating its own expectations.
"The company was already well ahead of the curve when last year's oil price fall started to hit revenues meaning that the company was already that much more prepared and lean, simply because it has needed to be, to navigate the events of the last five years," he said in a research note Tuesday.
The price of oil has seen a dramatic drop of around 50 percent since mid-June last year but has managed to pare some losses in recent months. BP CEO Bob Dudley has previously indicated that prices could linger at these levels for "several years."
Speaking at Egypt's Economic Development Conference in April, Dudley said that oil prices had been a "huge shock" for companies like BP. The industry had been living in a "world of luxury" over the last few years, he said, when prices were above $100 a barrel.
BP was the first European major to sound the alarm on tumbling oil prices - on December 10, it warned that it was implementing a cost-cutting program as a result. In January, BP announced job cuts in its onshore operations in the U.K.
It told CNBC that it expected a reduction of around 200 staff and 100 contractor roles in light of "major reshaping" for the business and "toughening market conditions."
BP's shares have seen some softness over recent trading sessions after a report in the Financial Times said that the British government had told the company .