By Giulia Petroni 
 

BP PLC said Tuesday that earnings fell in the first quarter, reflecting a challenging commodity environment exacerbated by declining oil prices and weak demand.

The London-based energy giant swung to a replacement cost loss--a metric similar to the net income figure that U.S. oil companies report--of $628 million for the three months ended March 31 from a profit of $2.10 billion for the year-earlier period.

The figure includes a $1.4 billion net adverse impact of nonoperating items and fair value accounting effects, BP said.

Stripping out one-off items, BP's underlying replacement cost profit, the company's preferred metric, fell to $800 million. A company-compiled consensus of 22 brokers' estimates had forecast the company's first-quarter underlying replacement cost profit at $710 million.

Revenue for the quarter decreased to $59.54 billion from $67.41 billion the previous year, BP said.

The company swung to a net loss of $4.37 billion from a profit of $2.93 billion.

Upstream production fell 2.9% to 2.58 million barrels of oil equivalent a day. Underlying replacement-cost profit before interest and tax in the upstream business--which produces oil and gas--fell to $1.02 billion from $2.88 billion last year.

BP said it expects second-quarter production to be lower and subject to uncertainties related to the implementation of the Organization of Petroleum Exporting Countries' restrictions, divestments and the coronavirus pandemic's impact on oil demand, among other factors.

Operating cash flow, excluding payments related to the 2010 Deepwater Horizon oil spill, was $1.23 billion, BP said.

Net debt for the period was $51.4 billion compared with $45.1 billion a year earlier.

Gearing--the ratio of net debt to the total of net debt and equity--was 36.2% from 30.4%. The gearing level is remains above the company's long-term target of between 20% and 30%.

BP said it maintained its quarterly dividend at 10.25 cents a share.

 

Write to Giulia Petroni at giulia.petroni@wsj.com

 

(END) Dow Jones Newswires

April 28, 2020 03:00 ET (07:00 GMT)

Copyright (c) 2020 Dow Jones & Company, Inc.
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