BP (LON:BP) has produced a small figurative quarterly profit ($72m) for the fourth quarter, as widely forecast. This should, to a degree, offset the impact of a number of negative surprises. Namely, the full-year production decline relative to 2015 had not been flagged. We don’t think the non-cash charge to square ongoing discounting of provisions and other costs amounting to $800, booked in Q4, was on the market’s radar either.
The full-year profit miss ($400m vs. market forecasts ranging between $687m-$560m) is less surprising given the still fragile operating environment, even for E&P majors. However, lower production and continuing bouts of low visibility over the group’s marginal expenses will compound investor uncertainties, particularly after Shell also wrong-footed forecasters last week. BP shares may not be treated as leniently this morning as the larger group was.
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