BP Slides After Projecting Up To $2B in Q2 Impairment Charges

BP (BP) American depositary receipts (ADRs) fell in premarket trading Tuesday after the energy giant said that it expects lower refining margins and an impairment charge of up to $2 billion will impact its second-quarter results.

The British oil and gas company said Tuesday that “significantly lower realized refining margins” are projected to have a negative impact between $500 million to $700 million when it reports second-quarter earnings at the end of the month.

BP Joins Exxon in Warning About Refining Margins

BP, which expects to take an impairment charge between $1 billion and $2 billion related to a review of one of its German refineries, is not the only one in the industry warning about potential hits to second-quarter results.

Exxon Mobil (XOM) on Monday said that lower refining margins would cause its second-quarter profits to be between $1.1 billion to $1.5 billion lower. The company also expects lower natural gas prices to cause a hit of about $300 million to $700 million when it reports earnings later this month.

BP ADRs, as well as its shares traded on the London Stock Exchange, were each down around 4% as of 8:30 a.m. ET Tuesday.