British oil and gas giant BP
For the quarter, the company recorded $1.79 billion in profit, down 67% compared to last year's $5.34 billion. It also increased its reserves for expenses related to the Gulf spill by another $7.7 billion, bringing the total thus far to nearly $40 billion. If you back out the reserve, along with other items, however, BP's profit increased 18% to $5.53 billion.
As a result, while it didn't chalk up the earnings growth of ExxonMobil
Production for the quarter was down 4% year over year, to 3.8 million barrels of oil equivalents per day. Nevertheless, thanks mostly to higher realizations, upstream operations contributed 21% more in earnings than in the same quarter of 2009. Refining and marketing profits jumped by 95%, owing largely to a stronger downstream environment, along with gains on asset sales.
The tragic and expensive accident in the Gulf may have one small silver lining for BP. Its management -- now led by CEO Bob Dudley, who replaced Tony Hayward on Oct. 1 -- has sorted through its assets with an eye toward raising as much as $30 billion through non-core property sales. Apache
But don't get the idea that the company is being gutted. In response to a question on BP's call Tuesday, CFO Byron Grote said that there was no intention of increasing the sales target. But as he noted, "There is great interest in the assets in the BP portfolio." Grote added, almost proudly, "But it is, in the current environment, a seller's market."
Grote clearly was also proud at the end of his prepared remarks, when he said: "I am encouraged by how well our businesses have continued to perform...These results demonstrate both the strength of our underlying business and assets, and the determination of our employees to move the company forward."
It's not predictable how much the Gulf spill will ultimately cost BP, or whether it'll be able to collect on the $4.6 billion it has already billed to Anadarko Petroleum
Fool contributor David Lee Smith doesn't own shares in any of the companies named in this article. The Fool owns shares of Devon Energy and ExxonMobil. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.