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While the London-based giant’s profit beat estimates thanks to a strong performance by its oil and gas traders, the surplus cash flow it uses to boost investor returns shrank by about 40 per cent. BP said it will repurchase a further US$1.75 billion of shares, US$1 billion less than in the prior period.Sign up to receive daily headline news from the Calgary Herald, a division of Postmedia Network Inc.
BP’s cash flow took a hit from a US$1.4 billion “surprise” build in working capital, a financial term that measures liquid assets and liabilities, Barclays PLC’s Lydia Rainforth wrote in a note. Most of that was related to annual bonuses paid to employees who helped deliver record profits last year, BP said.
The first-quarter results and guidance for the rest of the year “suggests that free-cash-flow momentum is likely to be weaker from here, although this could improve later,” RBC’s Biraj Borkhataria said in a note.
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