BP third-quarter earnings of $3.3 billion, missing analysts’ forecasts due to weak gas trading results while the firm wrote down a large portion of a U.S. offshore wind project.
The results fell well short of expectations for a $4 billion net income, the company’s second straight substantial quarterly miss.
Interim CEO Murray Auchincloss said that strong oil trading earnings and refining margins in the third quarter were offset by weak natural gas trading where there had been a “lack of volatility” due to high inventory levels in Europe and the United States ahead of winter.
The British company maintained its dividend at 7.27 cents per share and extended its $1.5 billion share buyback programme over the next three months, leaving its payout policy unchanged.
BP wrote down $540 million in the quarter on its wind power projects offshore New York after officials rejected a request for better terms to reflect what BP referred to as “inflationary pressures and permitting delays”.
Norway’s Equinor, BP’s partner in the projects, booked a $300 million impairment on Friday.
“New York put out a 10-point plan, which would help move these projects forward… We’ll be looking at that with our partner Equinor and deciding what we do moving forward,” Auchincloss told Reuters.
BP paid Equinor $1.1 billion in 2020 for a 50% stake in the venture to develop the Empire and Beacon offshore wind projects which have a combined capacity of 3.3 gigawatts, capable of powering 2 million homes.
“Earnings missed across all divisions. In the downstream, customers & products reported $2.1 bln vs consensus $2.4 bln, despite being supported by very strong oil trading results, suggesting weaker refining margin capture in the third quarter,” said RBC analyst Biraj Borkhataria.