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British Oil major BP PLC reported better than expected fourth quarter earnings Tuesday. $BP raised it's dividend as revenue is boosted by surging production. $BP report after fellow majors $XOM, $CVX, RDSA, $COP  and $TOT reports. 

Bp Rig

BP PLC ADR (NYSE: $BP) Reported Earnings Before Open Tuesday

$0.84 Beat $0.79 EPS Forecast and $73.75 Billion in Revenue

Earnings

BP reported Q2 earnings Tuesday with underlying replacement cost profit, used as a proxy for net profit, of $2.8 billion, versus $2.5 billion expected in a Reuters poll. That compared with a profit of $2.8 billion over the same period a year earlier and $2.4 billion in the first three months of 2019.

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. Total revenue for the second quarter came in at $73.75 billion, down 4.1% from a year earlier.

BP also said it will pay a 10.25 cents per share dividend as it did last quarter.

 

BP PLC NYSE: $BP

Market Reaction Pre-market $39.90 ▲ +0.81 (+2.03%)

The profits in reference to oil prices come at a time when Brent crude was trading at $64.15 Tuesday morning, down more than 14% when compared to the end of the second quarter in 2018.  U.S. West Texas Intermediate (WTI) was trading at $57.25 on Tueaday, almost 20% lower from a year earlier.

Highlights

  • BP said Gulf of Mexico oil spill payments of $1.4 billion on a post-tax basis in the second quarter were primarily the scheduled annual payments.

Upstream

  • BP's 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

Downstream

  • Downstream earnings fell 6% YoY to $1.4 billion due to lower throughput because of turnaround activities.
  • BP’s refining margins expanded in the quarter, its Rosneft adjusted EBIT fell 17% YoY to $0.6 billion.

Dividends and Buybacks

BP announced a dividend payment of $0.615 per American depositary share to be made on September 20 giving a dividend yield of 6.3% 

In the second quarter, BP bought back $75 million in stock. This year, the company plans to buy back stock  in  the second half of this year.

Outlook

BP has continued to work on optimizing its capex, selling non-core assets, and limiting oil spill charges. The company is forecasting 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.

Live From The Pit 

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