Is David Einhorn’s Thesis on BP Playing Out?
BP (NYSE:BP) reported a significant slide in fourth-quarter profits. Europe’s second largest oil company struggled with weaker refining margins and write-offs as it brought new projects online and increased its investment in exploration. The energy sector has raised some concerns this earnings season, but investors may find comfort in David Einhorn’s latest investment letter.
On Tuesday, BP announced adjusted profits of $2.8 billion for the recent quarter, down from $3.9 billion a year earlier, but slightly better than expectations. Full-year profit came in at $13.4 billion for 2013, compared to $17.1 billion for 2012. BP experienced strong growth from regions such as the North Sea, Angola, and the Gulf of Mexico.
“BP delivered strong operating performance throughout 2013, with increased asset reliability and major project delivery in both our Upstream and Downstream businesses,” said BP CEO Bob Dudley, in a press release. “These achievements underpin our financial targets for 2014 and lay the foundation for continued growth in sustainable free cash flow.”