Oil major BP reported a pretax loss of $865 million in the first quarter of 2016 as low oil prices continue to plague the company.
First-quarter replacement cost loss came in at $485 million, compared with a profit of $2.1 billion a year ago. The replacement cost loss came in well above expectations of $140 million in a poll of analysts provided by the company.
Replacement cost profit is a common accounting measure to report profits in the oil industry which takes into account the fluctuations in the price of oil. Oil prices have seen something of a rebound since BP's last earnings when a barrel was trading around $33 with Brent crude now fetching around $44 a barrel but there is no sign of major producers curtailing output in a bid to support prices further.
In a statement accompanying the results, BP Chief Executive Bob Dudley said that despite the challenging environment, the company was "driving towards our near-term goal of rebalancing BP's cash flows. Operational performance is strong and our work to reset costs has considerable momentum and is delivering results. Furthermore, development of our next wave of material upstream projects is well on track."
Shares of BP rose 2.3 percent in early trade on Tuesday.
In February, BP announced its worst annual loss in 20 years, reporting a loss of $6.5 billion for 2015 as a whole.
In the fourth quarter, the company took $2.6 billion in non-operating post-tax charges, primarily related to impairments of upstream assets as well as restructuring charges for the group. Including these charges and other offsetting effects, BP reported a replacement cost loss for the fourth quarter of 2015 of $2.2 billion.
On an underlying basis, replacement cost profit in the first quarter was $532 million, compared with $2.57 billion for the same period in 2015.
BP announced an unchanged dividend for the quarter of 10 cents per ordinary share, expected to be paid in June.
The group said that it had lowered costs and would continue to do so, expecting total organic capital expenditure in 2016 to be around $17 billion and, "in the event of continued low oil prices," sees flexibility to move to $15-17 billion in 2017, it said.
Last week, around 60 percent of BP shareholders rejected Bob Dudley's £14 million pay package – although the revolt was more symbolic as the pay had already been received by Dudley.
One trader said that Dudley's pay package "looms large" over the latest earnings despite signs of improvement.
"BP's profits fell 80 percent but the results were better than expected and an improvement from the end of last year," Joe Rundle, head of trading at ETX Capital said on Tuesday.
"Bob Dudley's pay deal obviously looms large over these figures and will stick in the throat of some investors," however, he noted that overall, BP had announced a "good set of figures."
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