BP earnings beat expectations, looking for settlement

Investors focused on a settlement?

BP posted a fourth-quarter profit and revenue that topped analysts' estimates and the company raised its dividend for the first time since the Gulf of Mexico oil spill in April 2010. The British-based oil giant company continues to focus on recovering from the effects of the explosion and sinking of the Deepwater Horizon drilling rig, but it plans to boost exploration and production capacity.

For the three months ended December 31, BP's profit fell 6% to $1.60 a share, beating forecasts by a penny. Revenue climbed 15% to $96.34 billion. It hiked its quarterly dividend 14% to $0.08 a share.

CEO Bob Dudley said he expects underlying production to be “broadly flat” in 2012. By 2014, as long as oil prices stay around $100 per barrel, operating cash flow should rise by about 50%, Dudley predicted. Stating, “2012 will be a year of increasing investment and milestones as we build on the foundations laid last year. As we move through 2013 and 2014, we expect financial momentum will build as we complete payments into the Gulf of Mexico Trust Fund, restore high-value production and bring new projects on stream.”

As for the elephant in the room (Gulf of Mexico oil spill), Dudley said BP would prefer to reach an out of court settlement with the U.S. Department of Justice than battle over the size of fines for years to come. “Our bias is towards settlement, but only at a fair and reasonable price,” stated Dudley. He dismissed suggestions that it would be better for BP to fight any fines in court, saying he understood investor needs for clarity now and that a settlement would help to lift the company’s share price.

BP (BP : NYSE : US$46.62), Net Change: -0.25, % Change: -0.53%, Volume: 10,722,004

Canaccord Genuity Inc. is a global investment banking and institutional brokerage firm. Their website is www.canaccordgenuity.com.

For disclosures of any equities mentioned here please see: http://www.canaccordgenuity.com/en/ODD/pages/disclosures.aspx.

About the Author

Canaccord Genuity Inc. is a global investment banking and institutional brokerage firm. Their website is www.canaccordgenuity.com.

For disclosures of any equities mentioned here please see: http://www.canaccordgenuity.com/en/ODD/pages/disclosures.aspx.

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