Net profits at the energy giant fell to $2.56bn for the first quarter, down from $7.1bn for the same period in 2008. The cause: what BP describes as ‘lower realisations' - or lower oil prices, to the rest of us. Even crude maths will tell you that when oil drops from a record $147 a barrel, as it was in July, to $41 a barrel, as BP was selling it in the first quarter, that's going to hit you hard in the pocket.
But while the figures may not seem too slick, BP won't be crying its wells dry: the result may look bad, but it was still ahead of analysts' forecasts. This boosted the share price by 1.1% to 489p this morning.
There were also signs that chief exec Tony Hayward's attempts to make BP leaner and meaner are having the desired effect. BP's production costs were down 11%, which is even more important now given the fall in oil prices. BP has certainly been taking advantage, churning out 4m barrels of oil a day in the first quarter - a rise of 4%. Its Thunder Horse facility in the Gulf of Mexico cranked out 300,000 of those, which isn't bad for something that sounds like a bit player in an old western. Thunder Horse will eventually be the largest oil producing facility in the US. Yee-haw.
But BP's news was more black than gold. Profits at its other main trading division, the refining and marketing operation, were also down 13% to $1.1bn. Refining volumes were ‘significantly worse' than a year ago, and margins were also lower. Meanwhile its troublesome Russian joint venture TNK-BP has performed badly, and BP expects the ‘overall weak environment for marketing and petrochemicals to continue' into this year. Then there's the small matter of an increased pension charge: BP paid $368m in retirement costs in the first quarter, compared with $246m a year ago, blaming the collapse of equity markets around the world. All in all, the company ended the quarter with net debts of $26.7bn.
So a largely underwhelming set of results for BP, with underlying profits down 8% even compared with the fourth quarter of 2008. The energy giant has clearly been hit hard by the downturn, which has reduced demand for crude and gas.
Still, the good news for investors is that BP has increased its quarterly dividend payout by 4% to 14 cents a share (which in sterling terms means the divi is up 40% over the year). Remarkably, this means the energy giant is actually paying out more than 100% of its profits to shareholders. In the current climate, that's brave, to say the least.
In today's bulletin:
BP's profits tank but share price still spurts
Revenue to spend £1bn chasing tax-dodgers
Curry comperes Consultancy Awards
JJB gets sporting chance
Recession leaves bosses 'caught in a trap'