British energy giant,
) reported fourth quarter 2013 adjusted earnings of 90 cents per
American Depositary Share (ADS) on a replacement cost basis,
excluding non-operating items. The bottom line fell a penny short
of the Zacks Consensus Estimate and decreased 25.6% from $1.21
earned a year ago as depressed downstream operations and lower
liquid realizations played spoilsport.
BP's total revenue decreased 4.7% to $95,096 million in the
quarter from the year-ago level of $99,811 million. However, the
top line compares favorably with the Zacks Consensus Estimate of
Full-year 2013 adjusted earnings came in at $4.26 per ADS on a
replacement cost basis, missing the Zacks Consensus Estimate of
$4.38 per ADS. Similarly, the full-year figure experienced a
year-over-year downfall of 20.8%. Total revenue increased 2.1% to
$396.2 billion in 2013 from $388.1 billion in the prior year.
Production and Price Realization
Total production of 2.246 million barrels of oil equivalent per
day (MMBoe/d) was down 1.9% year over year, mainly due to field
declines and divestments. However, new major project volumes in
the North Sea, Angola and the Gulf of Mexico partly offset the
Full-year 2013 oil and gas production decreased 2.7% to 2.256
MMBoe/d from the prior-year level of 2.319 MMBoe/d.
The company sold oil for $98.26 per barrel in the fourth quarter
(versus $100.00 in the year-earlier quarter) and natural gas for
$5.49 per thousand cubic feet (versus $5.03 in the year-earlier
quarter). Overall price realization rose 4.3% to $65.04 per Boe
from the year-ago level of $62.38 per Boe.
Dampened by depressed liquid price realizations and lower volume,
the Upstream segment experienced nearly a 12.9% year-over-year
decrease in adjusted underlying profit.
The Downstream segment digested a loss of $360 million in the
quarter, down from the year-ago profit level of $1,329 million.
The result reflects the impact of weak fuels business along with
a downcast refining environment.
Refining Marker Margin decreased to $11.0 per barrel from $16.9
in the fourth quarter of 2012. Total refinery throughput
decreased to 1,695 thousand barrels per day (MB/d) from 2,350
MB/d in the year-earlier period. Refining availability, however,
rose to 95.6% from 95.0% a year ago.
The Rosneft segment includes equity-accounted earnings from
associates, representing BP's stake in the former. The segment
posted profit of $1,087.0 million in the reported quarter.
In the reported quarter, BP's total capex was $7.2 billion of
which as much as $7.1 billion was organic. BP estimates total
capex at $24 billion to $25 billion for 2014. Starting next year
through to the end of the decade, the British giant predicts a
series of organic capital expenditure between $24 billion and $27
billion per annum.
BP's net debt was $25.2 billion at the end of the fourth quarter
compared with $27.5 billion a year ago. Net
debt-to-capitalization ratio was 16.2% versus 8.7% in the fourth
quarter of 2012.
Net cash provided by operating activities was $5.4 billion versus
$6.4 billion in the year-ago quarter.
BP expects full-year 2014 production level to be lower than 2013
due to the expiry of the Abu Dhabi onshore concession and the
effect of divestments.
For 2014, the company expects refining margins to improve from
the 2013 level due to turnaround activity. Additionally, the
company expects to see increased exposure to heavy crude
differentials in the U.S. owing to ramped up heavy crude
processing at the Whiting refinery.
BP - U.K.'s third largest oil company by market value after
Royal Dutch Shell plc
) - holds a Zacks Rank #3, which is equivalent to a Hold rating
for a period of one to three months. However, there are
better-ranked stocks in the oil and gas sector. These include
Cabot Oil & Gas Corp.
Imperial Oil Ltd.
), each sporting a Zacks Rank #1 (Strong Buy).
BP PLC (BP): Free Stock Analysis Report
CABOT OIL & GAS (COG): Free Stock Analysis
IMPERIAL OIL LT (IMO): Free Stock Analysis
ROYAL DTCH SH-A (RDS.A): Free Stock Analysis
To read this article on Zacks.com click here.