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Will BP's Earnings Report Bring Its Recent Rally To A Halt?

The recent rally in oil prices has helped pull up shares of BP.

The company will release its quarterly earnings report by the end of the month.

What should investors expect from the upcoming earnings report? Will it bring down BP stock?

Shares of BP (NYSE:BP) bounced back since the beginning of month as oil prices climbed up to around $50 a barrel. The company is expected to release its quarterly earnings report on Oct. 27. Currently, the consensus among analysts places the net earnings per share at $0.50. Despite the bounce in oil prices in the past couple of weeks, the quarterly average price of WTI was 52% lower than in Q2 2014 and nearly 20% sequentially.

Even though BP is on course to sell non-core assets in an aim to reach its annual $10 billion divestment plan, which should provide additional funds to finance its capex and improve its cost structure, the company could still come up short of market expectations. Let's consider some aspects related to the upcoming earnings report that are worth considering. We'll start with the dividend payment.

Dividend Still Paid - But for How Long?

Some investors might still be concerned over the high dividend yield, which is around 7%. The high yield suggests the company could slash its dividend given ongoing low oil prices. But these concerns, as I pointed out in a previous article, aren't expected to materialize for now. The company's free cash flow declined in the first...