BP Sells TNK Stake and Smashes Analyst Expectations

BP (NYSE:BP) stock climbed as much as 2 percent on Tuesday morning. The integrated oil and gas company reported first-quarter financial results that beat expectations. Underlying replacement cost profit (profit adjusted for inventory changes and one-off items) came in at $4.2 billion. This is about 11 percent lower than the year-ago period but beat estimates by nearly $1 billion.

Operating cash flow increased 17.6 percent on the year to $4.0 billion. BP completed the sale of its interested in TNK-BP at the end of March, pulling in $27.5 billion in cash and Rosneft stock. The gain on the disposal was $15.5 billion, of which $12.5 billion was recognized and reported as a non-operating item in the first quarter, while $3.0 billion of the gain was deferred and will be released to the income statement over time.

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Mar. 31, 2012 June 30, 2012 Sept. 30, 2012 Dec. 31, 2012 Mar. 31, 2013
Underlying RC profit ($) in millions 4,799 3,685 5,179 3,852 4,215
Underlying RC profit per ADS($) 1.52 1.16 1.63 1.21 1.32

Since the 2010 Deepwater Horizon disaster, BP has sold about $65 billion in assets to finance spill costs and reformat the company into leaner, more focused operation. First-quarter production was about 2.3 million barrels per day, 5 percent lower than the year-ago period. This is approximately 50 percent of Exxon Mobil’s (NYSE:XOM) production, and approximately 50 percent of where BP’s production stood in 2008.

Net debt at the end of the quarter was $17.7 billion, which is down from $31.0 billion in the year-ago period. This decrease was primarily driven by the $11.8 billion cash inflow from the sale of the company’s stake in TNK-BP.

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BP p.l.c. Common Stock Stock Chart - BP Interactive Chart - Yahoo! Finance

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