BP Reports 34% Increase in Net Income

BP, the world’s second-largest oil company, reported a 34% jump in third-quarter profit Tuesday as record energy prices more than outweighed hurricane damage to its rigs and refineries.

BP, which owns the Arco brand, said net income rose to $6.53 billion, up from $4.87 billion in the same period of 2004. Revenue jumped to $97.68 billion from $66.72 billion.

Production fell 2% from a year earlier, primarily because of hurricanes in the Gulf of Mexico.

“The recent hurricanes in the U.S. have impacted our results. However, underlying performance is strong, amplified by high but volatile prices of oil, gas and products,” Chief Executive John Browne said.

KBC Peel Hunt analyst Antoine Leurent said BP ultimately benefited from the hurricanes -- and the surge in oil prices they caused -- more than it suffered from the shutdowns.

BP said its profit excluding one-time items and gains or losses from changes in the value of fuel inventories, rose 27% to $5.33 billion. On that basis, nine analysts polled by Reuters had, on average, forecast $5.39 billion.

New York oil futures peaked during intraday trading at $70.85 a barrel Aug. 30 because of Hurricane Katrina, and Browne said prices “are expected to be well supported into the winter.”

The third-quarter result included a charge of $921 million, largely from a write-down on the value on Innovene, the company’s petrochemicals unit that it is selling for $9 billion to British chemical company Ineos. That compared with a charge of $394 million in the year-earlier period.

BP said it would pay a quarterly dividend of 8.925 cents a share, up from 7.1 cents for the same period last year. Shares of BP rose 77 cents to $65.42 in New York trading.