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* Underlying profits reach $2.3 billion in the third quarter
* BP takes $2.6 billion charge on large divestments
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By Ron Bousso
LONDON, Oct 29 (Reuters) - BP posted a sharp drop in
third-quarter profit on Tuesday, hurt by weaker oil prices and
lower production, but still beat expectations even as it took a
one-off charge of $2.6 billion linked to large asset sales.
London-based BP said third-quarter underlying replacement
cost profit, the company's definition of net income, fell 40%
from the year earlier period to $2.3 billion. That exceeded a
forecast of $1.73 billion in a company-provided survey of
analysts and compared to $2.81 billion in the second quarter of
2019.
The drop will not come as a surprise to investors after BP
indicated earlier this month that it would take a non-cash
charge of $2 billion to $3 billion in the quarter as it gets
closer to disposing of assets worth $10 billion by the end of
2019, a year ahead of schedule.
The $2.6 billion charge nevertheless pushed the firm to its
first quarterly net loss, of $700 million, since the second
quarter of 2016.
Although profit came under pressure, cashflow, seen as the
main measure of BP's underlying performance, was unchanged from
a year earlier at $6.1 billion.
Oil and gas production, excluding its share from its 19.75%
stake in Russia's Rosneft, was down 2.5% from a year earlier at
2.568 million barrels of oil equivalent per day as a result of
maintenance at several high-margin fields and a two-week
disruption to production in the U.S. Gulf of Mexico from
Hurricane Barry.
A 17% drop in oil prices in the third quarter from a year
earlier also weighed heavily on profits of other energy
companies including Italy's Eni and Norway's Equinor.
"BP delivered strong operating cash flow and underlying
earnings in a quarter that saw lower oil and gas prices and
significant hurricane impacts," Chief Executive Officer Bob
Dudley said in a statement.
BP earlier this month announced Dudley will retire next year
following a tumultuous decade at the helm of the company. He
will be succeeded by 49-year-old Bernard Looney, BP's head of
upstream.
(Reporting by Ron Bousso, editing by Louise Heavens and Kirsten
Donovan)
