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CALIFORNIA | BRIEFLY / ENERGY

Cost-Cutting Eases BP Amoco's Profit Decline

May 12, 1999|Bloomberg News

BP Amoco said its first-quarter operating profit fell 41% to $761 million, or 7 cents a share, as cost-cutting after its $62-billion acquisition of Amoco Corp. in December helped mitigate the effects of tough industry conditions. The profit drop was less severe than the median analyst forecast for a 47% decline and was in step with those posted by the top five U.S. oil companies. Chief Executive John Browne said cost savings of $200 million boosted profit, helping cushion the effects of a 23% slide in the price of oil. Only a fraction of the savings came from the acquisition itself. More savings from a program to eliminate jobs and slim BP's slate of projects will begin in the second quarter, he said. BP's results, calculated on a "replacement cost" basis to remove the effect that oil prices has on inventories, exclude an $860-million charge in the first quarter to pay for streamlining and $84 million of other non-recurring costs. Browne said he couldn't comment on the plan announced in April to buy Los Angeles-based Atlantic Richfield Co. The companies are assembling prospectuses for investors, to be released in the summer. BP Amoco's American depositary receipts fell 75 cents to close at $110.13 on the New York Stock Exchange.

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