BP Q2 Profit Climbs, Tops Estimates; Lifts Dividend, Plans Buyback; Stock Up

Shares of BP Plc were gaining 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 significantly higher profit and revenues in its second quarter. Underlying RC profit per ADS beat market estimates. The results reflected increased production and prices.

Further, bp said it intends to execute a $3.5 billion share buyback prior to announcing its third-quarter results. The company also announced a 10 percent increase in its quarterly dividend to 6.006 cents per ordinary share.

On an average, bp continues to expect to have capacity for an annual increase in the dividend per ordinary share of around 4 percent through 2025. bp continues to expect to be able to deliver share buybacks of around $4.0 billion per annum.

Looking ahead for the third quarter, bp expects oil prices to remain elevated due to ongoing disruption to Russian supply, gas prices to remain elevated and volatile due to a lack of supply to Europe, and industry refining margins to remain elevated due to ongoing supply disruptions.

The company expects third-quarter upstream production to be broadly flat sequentially, with improved base performance offset by planned maintenance activity in high margin regions.

For fiscal 2022, the company continues to expect reported upstream production to be broadly flat despite the absence of production from Russia incorporated joint ventures. On an underlying basis, upstream production would be slightly higher.

For the second quarter, replacement cost or RC surged to $7.65 billion from last year’s $2.38 billion. Underlying RC profit was $8.45 billion or 43.58 cents per share, compared to last year’s $2.80 billion or 13.80 cents per share.

Underlying RC profit per ADS was $2.61, up from $0.83 a year earlier.

On average, nine analysts polled by Thomson Reuters expected earnings of $2.13 per share for the quarter. Analysts’ estimates typically exclude special items.

Profit before tax increased to $14.06 billion from $5.14 billion. Earnings per share were 47.18 cents, compared to last year’s 15.30 cents. Earnings per ADS was $2.83 compared to $0.92 a year ago.

Total revenues and other income grew to $69.51 billion from prior year’s $37.60 billion. Sales and other operating revenues grew to $67.87 billion from $36.47 billion last year. All segments and regions recorded higher revenues in the quarter.

Analysts estimated revenues of $58.73 billion for the quarter.

Total hydrocarbons production in oil production & operations increased to 1,274 mboe/d from 1,245 mboe/d last year. Total hydrocarbons average realizations surged to $87.46/boe from $52.47/boe a year ago.

In London, BP shares were trading at 407.55 pence, up 3.87 percent. In pre-market activity on the NYSE, bp shares were trading at $29.55, up 1.72 percent.

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