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LONDON -- Major oil company BP Plc saw profit decline 6.4 percent in its third quarter -- less than analysts estimated -- and said its two largest U.S. refineries are increasing production, Bloomberg News reported.
The profit drop beat analysts' estimates the second time in a row, according to the report. Profit totaled $4.21 billion, excluding impact from holding inventories and one-time items, and beating the $3.98 billion median estimate of 13 analysts surveyed by Bloomberg News.
Adjusted profit at BP's refining division fell to $376 million, far from the $1.5 billion seen in the year-ago quarter. Meanwhile, exploration and production profit fell 36 percent to $6.34 billion, the report stated.
Net income also took a hit, sliding 29 percent to $4.41 billion, from $6.23 billion in the year-ago period, the report stated.
"It is a poor set of results, but not as bad as expected," Jason Kenney, an Edinburgh-based analyst at ING Wholesale Banking, who has a "buy" rating on BP shares, told Bloomberg News. Hayward needs a "couple of good quarters" to convince investors he can turn the company's fortunes around, Kenney added.
BP is consolidating its divisions and cutting jobs as part of a company restructure to improve performance. "BP's performance has materially lagged our peer group in the last three years," Hayward said Oct. 11, when he announced plans to modify BP's organization, the report stated. "We expect the revenue gap to narrow as major new production comes on stream."
In addition, BP refineries in Texas City, Texas, and Whiting, Ind., are expected to reach full capacity in the first half of 2008, the company stated.
"It looks like BP has turned the corner," Herman Bots, an analyst at Theodoor Gilissen Bankiers NV in Amsterdam, told Bloomberg News. "It is positive they aim to bring back their U.S. refineries to full capacity in 2008."