BP (BP.L) frustrated investors today as it declared second quarter profits of US $5.3 billion, down from the US $5.5 billion declared in the first quarter of 2011.

While the profit (declared on a replacement cost basis) for the three months to the end of June were a vast improvement on the US $17 billion loss declared at the same point last year, after the Gulf of Mexico disaster, investors were unimpressed.

Analysts had expected today’s profits to come in at around US $5.95 billion, so the declared US $5.3 billion has missed the mark by quite some way.

Chief executive Bob Dudley is mid-way through a project to reinvigorate the company by growing cash flows and identifying new growth areas in an attempt to bolster the company’s tired share price.

BP was trading at 464.75 pence, down 2.24 per cent as at 1000 hours.

However, most analysts have faith in BP’s ability to recover fully over the longer term. Manoj Ladwa, senior trader at ETX Capital, is among them.

He said, ‘BP is firmly on the recovery path as it posted a profit for the second quarter but the changing structure of the company could see a radically different business over time.

‘Although asset disposals have been essential in the wake of the Gulf of Mexico disaster, a shift in focus towards new discoveries is likely to increase volatility in future earnings.

‘With reduced exposure to rising crude oil prices and lagging behind its rivals, the CEO Bob Dudley is going to be under increased pressure to deliver results quickly or break up the business.’

The author of this article holds shares in BP