BP shares underperform on talk of weak Q3 profits

LONDON Thu Oct 6, 2011 11:55am BST

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LONDON (Reuters) - Shares in oil company BP (BP.L) fell 1 percent on Thursday, underperforming rivals, with two dealers blaming talk that the company had begun telling analysts its quarterly profits would be below their current forecasts.

BP denied giving analysts any such guidance.

"Sounds like net (profit) will be $5 billion (3.2 billion pounds) at best," said one dealer, who added that his investment house currently had a $5.3 billion forecast for BP's third-quarter net replacement cost (RC) profits.

JP Morgan Cazenove, one of the first banks to publish earnings estimates since the end of the third quarter, issued a forecast of $4.8 billion, 10 percent below the average forecast from a Reuters poll of three analysts.

JP M Morgan said its earnings per share forecast was 12 percent below the consensus forecast from other analysts.

Analysts frequently contact companies' investor relations' divisions after the end of a quarter to discuss the company's performance in the quarter, but companies are not allowed to give them any market-sensitive information that has not been made public.

BP has been the subject of rumours on several occasions in recent years that it was giving analysts guidance on upcoming earnings announcements, but a spokesman said the oil giant stuck firmly to the rules.

"We don't comment on our numbers in advance of reporting," he said.

JP Morgan Cazanove was not immediately available for comment on how it came to its estimate figure.

BP's Chief Executive Bob Dudley, who is under pressure from investors unhappy at the company's languishing share price, previously indicated the third quarter would be weak as the company restructures following last year's Gulf of Mexico oil spill.

BP shares traded down 1.0 percent at 386 pence at 10:46 a.m., against a 0.7 percent rise in the STOXX Europe 600 Oil and Gas index .SXEP. The stock was among the weakest blue-chip London stocks as the FTSE 100 .FTSE recovered from recent lows.

(Additional reporting by Sudip Kar-Gupta and Jon Hopkins; Editing by Will Waterman)

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