BP’s glitzy IR not enough to appease investors
Feb 03, 2010
Share price dips after disappointing results
Oil company BP saw its share price suffer its biggest fall in nearly a year yesterday as it reported profits that fell short of analysts’ expectations. BP’s fourth quarter net income was $4.4 bn, $0.4 bn lower than the consensus estimates.
The firm has won plaudits in both the US and the UK for its investor relations efforts, with special commendations for its website, use of multimedia and investor days. ‘Historically I have found it excellent in the way it presents its communication to the market but today is a very poor statement, leading to downgrades. No form of IR could have dressed up this disappointing performance,’ comments George Godber, co-manager of the Matterley S&W Undervalued Returns Fund
Investors have welcomed the efforts of new CEO Tony Hayward to streamline the business but, like the rest of the oil and gas sector, BP has suffered from lower prices and reduced demand.
In the presentation, Hayward indicated that BP was still trying to close the gap with competitor ExxonMobil, a goal that has seen him gain some ground. BP’s market capitalization stands at more than 40 percent less than that of its biggest competitor.
In the past year BP’s market capitalization has slowly been gaining ground: its shares have risen 15 percent, while Exxon’s have fallen 13 percent.