That, for the record, is what happens when analysts don’t mysteriously “mind-meld” a couple of weeks ahead of your results.
As we reported on January 13, a number of analysts spookily cut their earnings forecasts on rival Shell — all at the same time. The revisions were related to weaker than expected refining margins in the quarter.
BP’s fourth quarter numbers, meanwhile, missed expectations on — you’ve guessed it — a weaker than expected performance in refining. Or as BP put it:
Compared with a year ago the result for the fourth quarter reflected a continued weaker overall Refining and Marketing environment, including a refining indicator margin of $1.49 per barrel compared with $5.20 per barrel in the fourth quarter of 2008. BP’s actual refining margin declined even more than the indicator margin during this period. In addition, rising crude prices and reduced volatility compressed marketing margins and led to a weaker supply and trading contribution. These factors were somewhat offset by stronger operational performance and lower costs.
Crucially, BP also added:
Looking forward, in 2010 we expect refining margins to remain weak.
Not that this refining issue couldn’t be foreseen back in January, or for that matter the third or second quarter of last year.
Related links:
Independent refiner downgrades imminent? - FT Alphaville
Petroplus, still praying for a distillate recovery – FT Alphaville
Distillate hangover – FT Alphaville