BP’s Earnings Beat Analysts’ Expectations

BP (BP) reported its second-quarter results today. Its revenue of $72.7 billion beat analysts’ estimate by 2%, and its earnings per American depositary share of $0.84 beat analysts’ estimate of $0.79 by about 7%. In the second quarter, BP’s earnings fell 1% YoY (year-over-year), less than analysts’ estimate of 7% YoY.

BP’s Earnings Beat Analysts’ Expectations

BP’s earnings review

In the second quarter, BP’s adjusted earnings fell 0.4% YoY to $2.8 billion due profits falling in the company’s upstream, downstream, and Rosneft segments. Its upstream adjusted EBIT fell 3% YoY to $3.4 billion due to weaker realizations partly offset by stronger volumes. The company’s hydrocarbon production rose 6.5% YoY to 2.63 million barrels of oil equivalent per day, and its downstream earnings fell 6% YoY to $1.4 billion due to lower throughput because of turnaround activities. Whereas BP’s refining margins expanded in the quarter, its Rosneft adjusted EBIT fell 17% YoY to $0.6 billion.

Strategic update

BP has continued to work on optimizing its capex, selling non-core assets, and limiting oil spill charges. The company is aiming for capex of $15 billion–$17 billion from 2019 to 2021, and it plans to divest more than $10 billion in assets in 2019 and 2020. BP expects oil spill charges of about $2 billion this year.

BP’s shareholders’ returns

BP has announced a dividend payment of $0.615 per American depositary share to be made on September 20. Its dividend yield of 6.3% is higher than Royal Dutch Shell’s (RDS.A) 6.0%, ExxonMobil’s (XOM) 4.7%, Chevron’s (CVX) 3.8%, Total’s (TOT) 5.4%, and Suncor Energy’s (SU) 4.3%.

In the second quarter, BP bought back $75 million in stock. This year, the company plans to buy back stock to offset its scrip dilution since the third quarter of 2017. The company’s buyback program is weighted more toward the second half of this year.

Peer performance

In the second quarter, Total ‘s earnings fell 20% YoY. To learn more, read Total SA Stock Fell Marginally after Q2 Earnings. However, Suncor Energy’s adjusted EPS rose 10% YoY. Analysts expect ExxonMobil’s and Petrobras’s (PBR) EPS to fall 25% and 11% YoY, respectively, in the quarter. They expect Royal Dutch Shell’s and Chevron’s EPS to rise 10% and 2% YoY.