BP Stock Dips As Q3 Profit Misses View; Plans Addl. $1.5 Bln Buyback

Shares of BP Plc were losing around 4 percent in the morning trading in London as well as in pre-market activity on the NYSE after the British energy major reported Tuesday weak underlying replacement cost profit in its third quarter, below market estimates, as revenues were hit mainly by lower gas prices. On a reported basis, replacement cost profit was significantly higher, and it reported attributable profit, compared to last year’s loss.

Further, BP said it intends to execute a further $1.5 billion share buyback prior to reporting fourth-quarter results. The previous $1.5 billion share buyback program announced with the second quarter results was completed on October 27.

bp also announced a dividend per ordinary share of 7.270 cents for the third quarter.

Looking ahead, the company expects fourth-quarter reported upstream production to be broadly flat sequentially. bp expects oil prices to be supported by OPEC+ production restrictions and the continued demand rebound.

For 2023, bp expects both reported and underlying upstream production to be higher compared with 2022.

bp also said it continues to expect to be able to deliver share buybacks of around $4.0 billion per annum, at the lower end of its $14 billion – $18 billion capital expenditure range. It expects to have the capacity for an annual increase in the dividend per ordinary share of around 4 percent.

bp has increased its 2030 Adjusted EBITDA aims for resilient hydrocarbons and group by $2 billion to a range of $41-44 billion and $53-58 billion, respectively.

Murray Auchincloss, Interim Chief executive officer, said, “This has been a solid quarter supported by strong underlying operational performance demonstrating our continued focus on delivery. Momentum continues to build across our businesses, with recent start-ups including Tangguh Expansion, bpx energy’s ‘Bingo’ central processing facility and Archaea Energy’s first modular biogas plant in Indiana.”

For the third quarter, replacement cost or RC profit was $3.65 billion, compared to prior year’s $23 million.

Underlying RC profit was $3.29 billion, compared with $8.15 billion a year ago. Underlying RC profit per ordinary share was 19.14 cents, down from 43.15 cents in the prior year. Underlying RC profit per ADS was $1.15, compared to $2.59 last year.

Analysts polled by Thomson Reuters expected the company to report earnings of $1.37 per share for the third quarter. Analysts’ estimates typically exclude special items.

The reduction in underlying replacement cost profit for the third quarter mainly reflected lower oil and gas realizations and a weak gas marketing and trading result.

For the quarter, profit before taxation climbed to $7.31 billion from $1.98 billion in the prior year. Profit attributable to shareholders was $4.86 billion or $1.66 per ADS, compared to a loss of $2.16 billion or $0.69 per ADS in the same quarter last year.

Earnings per share were 27.59 cents, compared to loss of 11.45 cents a year ago.

Adjusted EBITDA for the quarter declined to $10.31 billion from last year’s $17.41 billion.

Total revenues and other income for the third quarter declined to $54.02 billion from $57.81 billion in the prior year. Analysts expected revenue of $57.71 billion for the quarter.

Sales and other operating revenues were $53.27 billion, down from $55.01 billion a year ago.

In London, bp shares were trading at 504.20 pence, down 4.27 percent. In pre-market activity on the NYSE, the shares were trading at $36.83, down 3.96 percent.

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