BP (NYSE:BP) appears to be shrinking. The British oil and gas producer reported earnings on Tuesday that were one-fifth the amount of those posted in the year-ago quarter. But excluding one-time taxes related to its recent asset divestments and liability payments, the company beat analysts’ expectations.
Profit dropped 72 percent in the three-month period, as its oil and gas production continued to fall. Analysts say this performance showed that the company is still working to recover from the Gulf of Mexico oil spill, according to the Wall Street Journal. That event, which was the worst oil spill in American history, has cost BP more than $42.2 billion since the Deepwater Horizon drilling rig exploded in 2010.
But the spill will haunt BP into the next quarter. On February 25, the trial to determine the company’s civic liabilities will begin, and with it, BP will face the possibility of billions of dollars more in penalties.
However, Chief Executive Officer Bob Dudley said that in 2012 the company set a strong base for future growth by selling assets and beginning several new drilling operations. “We will continue to see the impact of this reshaping work in our reporting results in 2013,” he said in the earnings release. “By 2014, I expect the underlying financial momentum to be strongly evident.”