BP plc (NYSE:BP) announced its quarterly and annual results this morning. The company lost $3.34 billion in the quarter. That is on items as the company’s earnings per ADS totaled $0.84 (one ADS is equal to six ordinary shares). In the same period last year, earnings per ADS totaled $1.07 and $3.21 for the third quarter of 2008. BP blames significantly lower prices for crude for the poor results. No surprise there.
Cash flow from operations rose for the quarter to $5.6 billion from$4.3 billion a year ago. For the year, cash flow rose from$24.7 billion a year ago to $38.1 billion in 2008.
In the quarter, BP wrote down $517 million of its investment in Russianoil giant Rosneft. BP’s other large Russian joint venture, TNK-BP, lost$992 million in the quarter as a result of asset impairments and othercharges.
BP’s refining and marketing business was mixed. For the quarter, profitreached $416 million, compared with the 2008 third quarter profit of$1.972 billion. The biggest hit came from inventory holdings. BP lost$6.06 billion over the year on its inventories; in the fourth quarterthe loss was a staggering $8.48 billion.
BP faced some challenges in the quarter and simply failed to meet them.The hits to inventories were certainly predictable, and surely no onein management expected the company’s Russian operations to be a sourceof net income.
There was one bright spot for BP. It more than doubled its cash on handover the past year, to $8.2 billion. BP shares are off more than 2% inpre-market trading this morning.
Paul Ausick
February 3, 2009
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