BP Plc, the world's second-largest listed oil company by market capitalisation, reported consensus-beating fourth quarter profits on Tuesday thanks to high oil prices and strong refining margins. The company also cheered shareholders with a 26 percent jump in its quarterly dividend to 8.5 cents, giving the stock a 1 percent boost before it fell back in line with the sector. But BP rekindled wider concerns about the industry's exploration prospects by failing to match all the oil it pumped with new reserves, as measured under US Securities and Exchange Commission rules.
BP said fourth-quarter proforma profit rose to $3.646 billion. Full year profits were over $16 billion, but short of the UK corporate record of $17.59 billion posted last week by rival Royal Dutch/Shell.
The big jump in the quarterly dividend follows calls from some investors for BP to shift its focus away from buybacks to dividends as the means of returning cash to investors.
The higher payout will bring the dividend yield on BP's stock in line with industry peers such as France's Total, analysts said, although it will still lag Shell.
BP remains committed to buybacks and in describing the dividend hike as a "one-time step-change", hinted that future rises would be much more modest.
Analysts welcomed the higher dividend.
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