BP Q1 Earnings: Revenues And Profits Suffer Due To Low Oil Price Environment, Cash Outflows Still Greater Than Inflows
BP Plc. (NYSE:BP) released its 2016 first quarter earnings report recently. [1] The company’s upstream price realizations continue to suffer due to the prevalent low oil price environment. As a result, BP’s revenues and earnings have taken a massive hit in the first quarter, with the only saving grace being that the profit estimates came in better than analyst expectations. [2]
BP has taken measures in the last few quarters to reduce its capital spending and overall cost structure in order to be able to better steer through the commodity trough. However, even with all the spending cuts, the cash outflows were greater than cash inflows for 2015 and the trend continued in Q1 2016.
If the price realizations continue to stay at these depressed levels for longer periods, the company will find it extremely hard to sustain its dividend program without resorting to external borrowing.
Have more questions about BP? See the links below:
- What’s BP’s Revenue & Earnings Breakdown In Terms of Different Products?
- What’s BP’s Fundamental Value Based On Expected 2016 Results?
- How Has BP’s Revenue Composition Changed In The Last Five Years?
- What Has Led To More Than 25% Decline In BP’s Revenues & EBITDA In The Last Five Years?
- By What Percentage Can BP’s Revenues Grow Over the Next Five Years?
- How Are BP’s Revenue & EBITDA Composition Expected To Change By 2020?
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Notes:- First quarter 2016 results, 26 April, 2016, BP Press Release [↩]
- BP Reports Surprise Profit on Strength in Refining, Trading, April 26, 2016, Bloomberg [↩]