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Oct. 27, 2020, 3:33 a.m. EDT

BP beats profit view amid upstream recovery

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By Jaime Llinares Taboada

BP PLC on Tuesday reported a narrowed underlying replacement cost profit for the third quarter of the year that beat market expectations.

The FTSE 100 oil giant made an underlying replacement cost profit of $86 million for the three months ended Sept. 30 compared with the company-compiled market consensus of a $120 million loss. The metric is similar to the net profit figure that U.S. oil companies use but strips out one-off items. BP had reported a $2.25 billion underlying RC profit a year earlier.

BP's net loss for the period came in at $450 million, narrowing from a $749 million loss a year earlier.

A weak oil market continued to hurt the British company in the third quarter, with average prices of $43 a barrel severely squeezing margins during the period. However, BP said that, compared with the second quarter, the company's financial performance benefited from the absence of significant exploration write-offs, and recovering oil and gas prices and demand. The upstream division swung to a $878 million underlying RC profit before interest and tax in the third quarter compared with a $8.5 billion loss in April to June.

BP's board declared a dividend of 5.25 cents a share for the period, in line with the shareholder payment reset announced this summer. It is down from 10.25 cents a year earlier.

The company reported net debt of $40.4 billion as at Sept. 30, down $500 million from the beginning of the quarter.

Write to Jaime Llinares Taboada at jaime.llinares@wsj.com; @JaimeLlinaresT

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