Broker snap: BP a 'hold' after third quarter results, says Investec

29th Oct 2013 09:50

Investec has reiterated a 'hold' rating on BP's shares after the oil company reported its third quarter results. BP has raised its dividend 5.6% to 9.5 cents a share as earnings in the third quarter fell less than expected. Profit adjusted for one-time items and inventory changes declined to $3.7bn from $5bn a year earlier, beating the $3.4bn forecast.The company said it will sell a further $10bn of assets by the end of 2015 and give most of the proceeds to shareholders, favouring buybacks. BP has already sold $38bn of assets to pay for the Gulf of Mexico oil spill of 2010."The stockmarket doesn't want the oil majors to spend money. Instead, investors want their cash back," according to Investec analyst Neill Morton."And BP has obliged this morning, with an increase in the dividend, a new $10bn disposal programme (with proceeds going to share buybacks) and indicated flat capex in 2014. The bull case for 2014 is that operational gearing could surprise on the upside. The downside is that this could yet be overshadowed by the Macondo legal fallout. Hold retained."RD