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BP Plc Lifts Dividend By 5.6% To Yield 4.7%

Shares in BP (LSE: BP) (NYSE: BP.US) lifted 4.9% in early trade this morning, as the oil major announced a positive set of third-quarter results.

Despite weakness caused by sell-offs and reduced income from its Russian operations, which led to a decline in underlying replacement cost profit from $5.02bn in Q3 2012 to $3.69bn, BP still beat analyst expectations that were set around $3.17bn. Encouragingly, it was also a substantial increase from Q2 2013’s $2.7bn figure.

Well-documented oil price movements haven’t helped the industry, but management confirmed that BP plans to increase its quarterly dividend to 9.5 cents per share, a 5.6% increase, in line with its commitment to maintaining a progressive and sustainable dividend. The Board also declared its intention to review the level of dividend with the first and third quarter results each year.

BP Group chief executive Bob Dudley commented:

“In 2011 we set a clear target for operating cash flow in 2014 and we are confident in its delivery. The strong operational progress we are now seeing across the group, combined with our focus on disciplined investment, also underpins our confidence in growing long-term sustainable free cash flow and being able to increase shareholder distributions. Today’s announcement is a further demonstration of this.

“In line with continued capital discipline, we expect BP’s capital spending in 2014 to remain around the level expected for this year, in the range of $24-to-$25 billion.”

The company also gave an update on the total cumulative net charge to BP’s accounts related to the Gulf of Mexico oil spill, which now stands at $42.5bn.

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> Sam does not own shares in BP.