BP (LON:BP) revealed a hit to its underlying replacement cost profit in its third quarter results on Tuesday.
Shares in the British multinational oil and gas company were down during Tuesday morning trading.
Underlying replacement cost profit is BP’s definition of net income.
The company said that underlying replacement cost profit for the third quarter of the year amounted to $2.3 billion, considerably lower than the $3.8 billion figure recorded a year prior.
“The result was impacted by significantly lower Upstream earnings, resulting from lower prices, maintenance and weather impacts,” BP said in its third quarter results.
BP added that a divestment-related, non-cash, non-operating after-tax charge of $2.6 billion caused a reported loss of $700 million for the quarter.
“BP delivered strong operating cash flow and underlying earnings in a quarter that saw lower oil and gas prices and significant hurricane impacts,” Bob Dudley, Group Chief Executive, commented on the results.
“Our focus remains firmly on maintaining financial discipline and delivering safe and reliable operations throughout BP,” the Group Chief Executive continued.
Bob Dudley said: “We’re also continuing to advance our strategy, making strong progress with our divestment plans and building exciting new opportunities in fast-growing downstream markets in Asia.”
Meanwhile, Chief Financial Officer Brian Gilvary said that “net debt stayed flat in the quarter, though gearing rose slightly following a reduction in equity as a result of divestment-related impairment charges.”
“With growing free cash flow and receipt of disposal proceeds, we continue to expect net debt to trend down over time. In addition, the underlying effective tax rate for the quarter was lower than previously indicated, mainly due to higher-than-expected estimated Rosneft earnings and a lower-than-expected impact from the Upstream profit mix,” the Chief Financial Officer continued.
Earlier this year in July, the British multinational oil and gas company said that underlying replacement cost profit amounted to $2.8 billion for the second quarter of the year.
Shares in BP plc (LON:BP) were trading at -0.90% as of 09:24 GMT Tuesday.