Obviously, forecasts were cut for our big oil suppliers — it’s been the plummeting price of the stuff, which has hovering around $50 a barrel for much of January; it’s quite known. The price didn’t even take a climb even to a bit after slightly exceeding at US$ 60, now it is on US$ 55 level. No wonder, with the passage of time, forecasts have been reported to slide.
Since December’s foggy freeze, BP share price has warned up, reaching approx. 440p after a low of 373p. Just three months ago, there were reports of City brokers to be forecasting earnings/share (EPS) of around 37.8p for a year to this year’s December. It further dropped to 23.5p a week ago where we have even had a further cut since 22.6p rating.
As for the cutting costs, BP has been shelving projects, and when 2014 results were released we heard of a drop in underlying replacement cost profit at US$ 2.2bn from US$ 2.8bn, coupled with around US $3.6 billion net charge in vast platform to have been caused by exploration and development impairments due to low oil prices.
Might be a possibility for analysts to be pondering Bob Dudley’s opinion that low oil could be with us for two or three years and factoring in further cost-cutting even with lowered predictions point to big rises in EPS for this year and next, with dividends expected to yield almost at 6%.
Similarly, something is happening at Royal Dutch Shell, where EPS forecasts have been cut in the past week from 133p to 131.2p.Not to mention, At BG Group, the pattern has been repeating, with the EPS consensus forecast for year 2015 down to 27.1p today from 29.5p a month ago and 55.5p three months ago.