Monday, October 25, 2010

BP (NYSE:BP) Shares Hurt by Moratorium

Being the largest energy company operating in the Gulf of Mexico, BP (NYSE:BP) was hit hard by the oil drilling moratorium imposed by the Obama administration. Their next quarter will reflect that with lower revenue and earnings.

Expectations for the performance of BP for the last quarter are being lowered, as it looks like they'll be generating a profit of $4.8 billion, down from $5.4 billion in profits last year in the same quarter.

This will be measured against BP's peers, who are expected to have improved quarters, and which will put the pressure on new CEO Bob Dudley to do something to improve the performance of the company and reinstate the dividend.

Most industry observers say if BP doesn't reinstate the dividend soon, they will probably incur a loss of major shareholders like pension funds who have held onto their shares in light of hopes of the dividend being instated soon; the only reason they invest in BP in the first place.

BP has historically paid out more than their competitors in dividends.

BP will report their earnings on November 2.

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