Friday, October 22, 2010

Citigroup (NYSE:C) Says BP's (NYSE:BP) Third Quarter Results Irrelevant

While a number of analysts are pointing out the solid third quarter a number of oil and gas companies are expected to enjoy, with BP (NYSE:BP) missing out on it, Citigroup (NYSE:C) analysts say it's largely irrelevant as to the earnings put up by BP in the third quarter.

Citigroup said, "The path to rehabilitation post Macondo and Bob Dudley's new strategic direction are the key to performance rather than Q3 earnings."

Analysts from UBS (NYSE:UBS) thought in a similar way as Citigroup concerning BP, but added they do need to remain competitive in the midst of their ongoing transformation.

"The focus will be on the ongoing implications of the Macondo disaster but it will be very important to see that underlying operating and financial performance remains competitive," said UBS in a note to clients.

One strong area in the short term BP should benefit from is in reference to their refining margins.

The refining facilities of BP are located primarily in the United States, where margins this year soared by close to 30 percent, while margins for their competitors like Exxon (NYSE:XOM) and Royal Dutch Shell (NYSE:RDS-A), which have larger refinery exposure in Europe, were flat at best for margins.

No comments: