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BP Reports 3rd-Quarter Profit Up 34 Pct.


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This is why gas costs so much.

http://biz.yahoo.com/ap/051025/earns_britain_bp.html?.v=2

BP Reports 3rd-Quarter Profit Up 34 Pct.

Tuesday October 25, 7:28 am ET

By Jane Wardell, AP Business Writer

BP Reports Third-Quarter Profit Is Up 34 Percent Despite Hurricane Impact

LONDON (AP) -- BP PLC, one of the world's largest oil companies, reported a 34 percent rise in quarterly profit Tuesday as record energy prices more than outweighed hurricane damage to its rigs and refineries.

BP said net profit for the three months ended Sept. 30 rose to $6.53 billion, up from $4.87 billion in the third quarter of 2004. Revenue jumped to $97.73 billion from $66.73 billion.

"The recent hurricanes in the U.S. have impacted our results. However, underlying performance is strong, amplified by high but volatile prices of oil, gas and products," said Chief Executive Lord Browne.

Production was down 2 percent compared to the third quarter last year, primarily because of the impact of hurricanes in the Gulf of Mexico, the company said.

"We anticipate production from the deepwater Gulf of Mexico to be back to normal, with the exception of the Shell-operated Mars project, by the end of the year," Lord Browne said.

BP is the first major oil company to report quarterly results reflecting the impact of the hurricanes, ahead of Royal Dutch Shell PLC and Exxon Mobil Corp. later this week.

Oil prices peaked at $70.85 a barrel on the New York Mercantile Exchange on Aug. 30 after Hurricane Katrina struck the Gulf Coast, temporarily shutting down at least 80 percent of its crude-oil and natural gas production and crippling many refineries. Hurricane Rita followed four weeks later, delaying a return to normal production.

Browne said that oil prices "are expected to be well supported into the winter."

The company said its replacement cost profit for the quarter, considered a key indicator by analysts, rose 16 percent to $4.41 billion from $3.79 billion. The measure excludes exceptional items and gain in the value of inventory holdings, providing the amount it would cost to replace assets at current prices.

The third-quarter result included a net non-operating charge of $921 million, largely due to the loss of fair value on Innovene, the company's petrochemicals unit that it is selling for $9 billion to British chemical company Ineos PLC. That compared with a charge of $394 million in the third quarter of 2004.

BP said "the proposed sale was sufficiently well advanced at the end of September for the Innovene operations to be classified as a 'disposal group' as of Sept. 30."

Shares in BP were down 1.5 percent at 607.5 pence ($10.79) in trading on London's Stock Exchange.

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Okay -- THIS needs to be headline news. Same goes for Exxon's 32% increase in profits in 2nd Qtr.

This is just downright WRONG. Is the petroleum industry at all regulated by the gov't? There's gotta be a way, as a nation, we can gain control of this situation.

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How is demand any higher? How would that account for an increase of profits by 34%?

Demand was not effected by the hurricanes -- SUPPLY was supposedly effected. And the article states that the supply side of this only decreased by 2%.

If a large corporation sees a jump like this in profit per quarter -- there is almost something a bit rotten going on.

(Actually, to caveat my statement, I have heard that demand at some points in the hurricane season were quite heavy (i.e., right before a hurricane hits), but it still seems a bit too much -- those should have been daily or at the most weekly demand spikes)

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A few things you need to see.

1st- Profits in BP are not solely based on the sale of gas. There are literally THOUSANDS of components ont he companies spread sheets. Labor cost, investment results in the pensions, subsidiary performances, etc etc etc.

2- Demand is higher because of speculation on the futures market. Not current day sales figures.

3- While this quarter is very high, those of us invested in them have watched an up and down cycle for a few years now.

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It's not price gouging. It's basic economics.

Demand is high, profits will increase.

You are correct. It is basic economics.

If a handful of large companies completely control a market for a basic necessity with inelastic demand, and they are not forced by the market structure to compete on the price they charge for the item, they will not lower their prices, but will instead will maximize their profits.

It sucks, but unless they actively collude with each other in violation of antitrust laws, it is probably not illegal.

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The really bad news is that gas prices have dropped 25 cents and the new york times wants gas taxes to keep prices at 3 dollars so we will be forced to change our gas guzzling car driving ways. and have more money to give to the 'poor'

I actually agree with the Times on this.

Keep gas at 3 bucks a pop or higher. I just know I disagree with them on where that consumption tax money should be spent.

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It's not price gouging. It's basic economics.

Demand is high, profits will increase.

Kilmer, this is NOT basic economics, because oil is a necessity, there is no other alternative. The oil companies are also not "competing" with each other for business.

This is a monolopy run by our government, it doesn't take a brain surgeon to see that.

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Kilmer the thing is the sniveling hasnt really been about the gas prices its been about the profit margin of the corporations.

Liberals would not mind gas actually being 99 cents as long as there was a $2 gas tax to keep inflated numbers.

BULLSH!T.

I am a liberal, and I want nothing of the sort. That is akin to me saying conservatives want the cost to be above $2.00 so the oil companies can make record profits on the backs of working Americans and the poor. . . Oh wait, they ARE doing that :doh:

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BULLSH!T.

I am a liberal, and I want nothing of the sort. That is akin to me saying conservatives want the cost to be above $2.00 so the oil companies can make record profits on the backs of working Americans and the poor. . . Oh wait, they ARE doing that :doh:

Who is calling Bull?? You?

The same person who would b!tch and moan about a $2.00 ATM fee from a bank yet would roll over like a whipped puppy when Democrats want to raise taxes 10%

Oh, and what is the price of a gallon of Scope going for these days? And do not give me this baloney about commodities. Scope is scope, and gas is gas. $3.00 per gallon is a bargain IMO.

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The question that is realy bothering me is, If gas prices are coming down, WHY IN THE HELL HASN'T DIESEL??????????????? :mad:

I am still paying anywhere from 14 to 23 percent in fuel surcharges for shipping LTL or parcel. FedEX capped their surcharge for thirty days at 16.5%. But most freight companies are still increasing their surcharges. Makes it tough to stay profitable as a small company.

Not to mention that I drive a 3/4 ton diesel pick-up.

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The question that is realy bothering me is, If gas prices are coming down, WHY IN THE HELL HASN'T DIESEL??????????????? :mad:

I am still paying anywhere from 14 to 23 percent in fuel surcharges for shipping LTL or parcel. FedEX capped their surcharge for thirty days at 16.5%. But most freight companies are still increasing their surcharges. Makes it tough to stay profitable as a small company.

Not to mention that I drive a 3/4 ton diesel pick-up.

Because Diesel is also known as heating oil. If you have ever run a diesel truck you would know that this time of the year Diesel prices are higher.

Other than that why is this making you less profitable. Are you not passing on your costs to the customer?

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Gas was $2.89 at my local station at the beginning of last week. Today it is $2.17. Do you really believe that demand has dropped that much in a week? I don't think so.

That's not demand. Demand is the price to buy and sell it on the futures market.

It's not as simple as BP deciding to lower prices of gas because less people are buying it at the pump.

It's about the future cost of a barrell of oil.

I have BP (as well as Exxon/Mobil) stock.

chom, oil is NOT a necessity. It's a luxury. One that admittedly, we've become dependant upon. But there are alternatives. They may not be easy ones, but they do exist.

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Because Diesel is also known as heating oil. If you have ever run a diesel truck you would know that this time of the year Diesel prices are higher.

Other than that why is this making you less profitable. Are you not passing on your costs to the customer?

I know the deal with Diesel. We've had diesel vehicles in our family for many years. The thing is that diesel sky rocketed right along with gas post-Katrina. But it hasn't seen the drops that gas has, not much at all. STILL 2.90 a gallon.

The cost of shipping is included into our pricing. We ship prepaid East of the Mississippi. We have increased our prices twice in the last two years without a drop off in sales 9 actually about 36% up over last year). The problem is that our competitors are shipping product freight included. We have to follow suit to stay in the game.

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.

chom, oil is NOT a necessity. It's a luxury. One that admittedly, we've become dependant upon. But there are alternatives. They may not be easy ones, but they do exist.

In economic terms, oil is currently a necessity because alternatives or just doing without are not an option for most people. Someday we will wean ourselves of oil, but in 2005, it is a necessity.

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