BP Amoco’s 1st-Quarter Profit More Than Triples

BP Amoco, the world’s third-biggest publicly traded oil company, said Tuesday that its first-quarter profit more than tripled amid rising oil prices and said further cost cuts will boost income for the rest of this year.

Profit from operations rose to $2.71 billion, or 13.8 cents a share, from $761 million, or 3.5 cents a share, a year earlier. The profit was higher than analysts’ expectations, which ranged from $2.4 billion to $2.62 billion.

Oil prices, which more than doubled during the quarter from a year earlier, will remain near current levels for the rest of 2000, Chief Executive John Browne said. With BP’s oil production unlikely to rise through 2001, profit growth will come from higher natural gas output and from savings from the buyouts of Atlantic Richfield Co. and Burmah Castrol, he said.

Last month, BP completed its $27.8-billion acquisition of Los Angeles-based Arco, which was announced more than a year earlier. The London-based company also during the first quarter agreed to buy Burmah Castrol--maker of the world’s biggest-selling motor oil--for $5.2 billion.

BP said cost-cutting from its $62-billion takeover of Amoco Corp.--including job cuts--contributed $280 million before tax to the overall profit figure. The result was a record for the company.

Browne said BP will cut $3 billion in costs in addition to the $2.1 billion slashed by the end of last year. The additional savings will come from the purchases of Arco and Burmah Castrol as well as from its own internal operations, he said.

BP’s American depositary receipts fell $1.94 to close at $53.19 on the New York Stock Exchange.

BP’s profit is calculated on a replacement cost basis, taking into account the cost of replacing BP’s reserves at current oil prices and stripping out exceptional items.