Due To Challenging Oil Market, BP Profit Drop But Still Beats Analyst Expectations

BP (NYSE: BP) announced that their third quarter earning dropped by 34% after an industry wide decline in oil and natural gas prices. Profits fell to $5.34 billion from the amount of $8.04 the previous year. The lower were in large part due to total sales falling to $67.9 Billion despite increase in production by 6.9%.

Despite the slowing down of earnings, Share prices still rose 3.45% in the London Stock Exchange during the morning trading when CEO, Tony Hayward, announced the company’s decision to cut more costs, up to $4 billion dollars.

During Hayward’s tenure, BP has downsized over 3,000 jobs the previous year and will most likely shed close to 5,000 this year. Another contributing factor for the rise in share prices is the rising price of crude oil which has broken the $80 threshold in recent weeks.

BP’s competitors, Royal Dutch Shell (NYSE: RDS.A), Chevron Corporation (NYSE: CVX) and Exxon Mobile (NYSE: XOM), are set to release earnings data later this week. BP has outpaced Shell’s growth of 6.7% with a 13% increase in share prices since the beginning of this year.