BP Amoco’s Profit Soars in the Wake of Acquisition Spree
BP Amoco said its fourth-quarter profit nearly doubled as higher prices for crude oil and the integration of newly acquired businesses more than offset pinched profits in its chemicals business.
The oil giant’s shares declined, however, as Chief Executive John Browne said oil and gas production this year will increase 5.5%, a target some analysts doubt as BP shifts from acquisitions to investing in its own operations.
After spending more than $100 billion to acquire Atlantic Richfield Co., Amoco Corp., Burmah Castrol and others, BP now plans to spend $12 billion to $13 billion this year on increasing production. Even so, the plan may prove to be ambitious as economies worldwide slow, analysts said.
The company’s American depositary receipts fell $2.49 to close at $51 on the New York Stock Exchange.
BP said increased oil and gas production volumes and its success in cutting costs also contributed to the rise in operating profit to $4.09 billion, or 18 cents a share, from $2.12 billion, or 11 cents, a year earlier.
Profit in BP’s exploration and production business jumped 81% to $4.7 billion.
Improved profit margins and the contribution from BP Amoco’s buyout of Arco drove a 211% increase in operating profit in its refining and marketing business to $1.44 billion.
Earnings at the chemicals business fell 46% to $140 million due to steeper prices for oil--its main raw material.
At a Glance
Other earnings, excluding one-time gains or charges unless noted, include:
* Blockbuster Inc. said its operating profit rose 10% in the fourth quarter to $37.8 million, or 22 cents a share, 2 cents better than analysts expected. The video-rental chain, which is majority-owned by Viacom Inc., said revenue rose 12% to $1.34 billion.
* Chiquita Brands International Inc. said its fourth-quarter loss narrowed to $68.8 million, or $1.10 a share, from $74.8 million, or $1.20, a year ago, as cost-cutting efforts at its fresh-produce division resulted in savings for the world’s leading banana producer. Sales fell 15% to $528.5 million.
* Deere & Co. said its fiscal first-quarter profit rose 50% to $56.4 million, or 24 cents a share, boosted by strong sales of agricultural equipment. Revenue rose 15% to $2.68 billion. Deere said the slowing U.S. economy kept its earnings from meeting analyst forecasts of 27 cents.
* HotJobs.com Inc. said its fourth-quarter operating loss narrowed to 19 cents a share from 15 cents, a penny better than Wall Street expected, as revenue nearly quadrupled to $31.5 million from $8.6 million. But the online job recruiting company warned that revenue for 2001 would miss estimates because of a sluggish economic environment.
* MetLife Inc. reported a 9% increase in fourth-quarter profit to $404 million, or 51 cents a share, meeting expectations, boosted by expense-cutting and higher premiums for its life insurance. Revenue grew 20% to $8.4 billion. The insurance company also said the Federal Reserve had approved its application for bank holding company status and its acquisition of banking company Grand Bank of Kingston, N.J. MetLife is the first insurer to buy a bank after the passage of the Gramm-Leach-Bliley Act of 1999, which allows banks, insurance companies and brokers to merge or enter each other’s businesses for the first time since the 1930s.
* NBC Internet Inc. said its fourth-quarter operating loss narrowed slightly to $46.9 million, or 74 cents a share, better than the 81-cent average forecast of analysts, but it warned of weaker results ahead. The online media company said it expects first-quarter revenue of about $16 million, well below Wall Street expectations of $26 million, because of a difficult advertising market.
