BP Results Still Hurt by Gulf of Mexico Spill

4/26/16 Wall Street Journal

BPLONDON— BP PLC’s fatal blowout in the Gulf of Mexico in 2010 continues to haunt the company, helping to drag its quarterly earnings into a second consecutive loss and overshadowing the British oil giant’s progress on cost cuts.

BP on Tuesday said its earnings took a $917 million hit in the first quarter related to the Deepwater Horizon explosion that killed 11 workers and caused a massive spill in the Gulf of Mexico, a disaster that changed the course of the British oil giant and cost the company $56.4 billion to date.

The additional spill costs and the weakest oil prices in over a decade cast a cloud over BP’s financial performance, despite signs that heartened investors and caused the firm’s shares to jump over 4%.

Counting the Deepwater Horizon costs, BP said its equivalent of net earnings was a $485 million quarterly loss. Stripping out those and other one-time charges, BP had a profit of $532 million in the first quarter, significantly beating analysts’ consensus forecast for a loss of $140 million.

The spill forced the company to sell more than $40 billion in assets, pull back its ambitions and craft the business around a smaller set of high-value oil and gas fields.

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