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BP Q4 Earnings & Revenues Beat Estimates on Higher Oil Prices
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BP plc (BP - Free Report) reported fourth-quarter 2021 adjusted earnings of $1.23 per American Depositary Share (“ADS”) on a replacement cost basis, excluding non-operating items. The bottom line beat the Zacks Consensus Estimate of earnings of $1.18 per share and also rose from 3 cents reported a year ago.
Total quarterly revenues of $52,238 million surpassed the Zacks Consensus Estimate of $42,111 million. Also, the top line increased from $30,185 million in the year-ago quarter.
The strong quarterly earnings were driven by higher realizations of commodity prices and stronger refining business.
The integrated energy major announced that before declaring results for the January-end quarter, it has intended to execute an additional $1.5 billion of share repurchases. The company anticipates buying back $1 billion worth of shares every quarter, considering Brent crude price at $60 per barrel.
Operational Performance
Oil Production & Operations:
In the fourth quarter, BP reported total production of 1,358 thousand barrels of oil equivalent per day (MBoe/d), almost flat from 1,359 MBoe/d in the year-ago quarter.
BP sold liquids at $71.07 a barrel in the fourth quarter compared with $38.58 in the prior-year period. It sold natural gas at $9.27 per thousand cubic feet compared with $2.38 in the year-ago quarter. Overall price realization rose to $66.94 per Boe from the year-ago level of $33.18.
After adjusting for non-operating items, underlying replacement cost earnings before interest and tax for the segment amounted to $4,024 million. The figure jumped from earnings of $563 million in the year-ago quarter. Higher commodity price realizations primarily caused the upside.
Gas & Low Carbon Energy:
Segmental profits totaled $2,211 million, improving from earnings of $154 million in the year-ago quarter, primarily led by increased oil equivalent production and price, and higher production.
In the fourth quarter, the total production of 974 thousand barrels of oil equivalent per day (MBoe/d) improved from 796 MBoe/d in the year-ago quarter. Key project start-ups primarily contributed to the production.
Customers & Products:
After adjusting for non-operating items, underlying replacement cost earnings before interest and tax for the segment amounted to $611 million, up significantly from $126 million in the year-ago quarter. A favorable refining business aided the segment.
BP-operated refining availability for the December-end quarter was reported at 95.4%, reflecting a decline from 96.1% in the year-ago quarter. Total refinery throughputs from the fourth quarter were reported at 1,644 thousand barrels per day (MBbl/D), improving from 1,628 MBbl/D in the prior-year quarter.
Rosneft:
Earnings from the segment amounted to $745 million, suggesting an increase from $311 million in the December-end quarter of 2020. Higher oil prices aided the segment’s results.
Capex
Organic capital expenditure for the reported quarter was recorded at $3,512 million. The company reported total capital spending for the quarter at $3,633 million.
Financials
BP's net debt, including leases, was $39,411 million at the end of the fourth quarter versus $48,196 million in the prior-year quarter. Gearing was recorded at 30.4% compared with 36% in the prior-year quarter.
Outlook
For 2022, BP expects a capital expenditure of $14-15 billion. It continues to expect $14-16 billion per annum through 2025.
The company expects upstream production to remain flat year over year in 2022. For the first quarter of the year, the company projects a sequential decline in upstream production due to a base decline and higher maintenance.
Moreover, BP expects to receive $2-3 billion of divestment and other proceeds this year.
Zacks Rank & Stocks to Consider
The company currently carries a Zacks Rank #3 (Hold).
ConocoPhillips (COP - Free Report) , based in Houston, TX, is primarily involved in the exploration and production of oil and natural gas. COP recently reported fourth-quarter 2021 adjusted earnings per share of $2.27, comfortably beating the Zacks Consensus Estimate of $2.20.
ConocoPhillips’ earnings for 2022 are expected to soar 62.1% year over year. COP reported preliminary 2021 year-end proved reserves at 6.1 billion Boe. COP added its total reserve replacement ratio at 377%. As of Dec 31, 2021, ConocoPhillips had $5,028 million in total cash and cash equivalents.
RPC, Inc. (RES - Free Report) is among the leading providers of advanced oilfield services and equipment to almost all prospective oil and gas plays in the United States. RPC reported adjusted earnings of 6 cents per share for the fourth quarter of 2021, beating the Zacks Consensus Estimate of 3 cents.
RPC is expected to see an earnings growth of 1066.7% in 2022. As of Dec 31, RPC had cash and cash equivalents of $82.4 million, up sequentially from $80.8 million. Nonetheless, RPC managed to maintain a debt-free balance sheet.
Marathon Petroleum Corporation (MPC - Free Report) is a leading independent refiner, transporter and marketer of petroleum products. MPC reported fourth-quarter 2021 adjusted earnings of $1.30 per share, which comfortably beat the Zacks Consensus Estimate of 47 cents.
Marathon Petroleum is expected to see an earnings growth of 129.8% in 2022. As of Dec 31, MPC had cash and cash equivalents of $5.3 billion. Marathon Petroleum repurchased shares worth $3 billion in the October-January period and has now completed around 55% of its target to buy back $10 billion in common stock. Further planning to reward its shareholders, MPC announced a $5-billion buyback program.
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BP Q4 Earnings & Revenues Beat Estimates on Higher Oil Prices
BP plc (BP - Free Report) reported fourth-quarter 2021 adjusted earnings of $1.23 per American Depositary Share (“ADS”) on a replacement cost basis, excluding non-operating items. The bottom line beat the Zacks Consensus Estimate of earnings of $1.18 per share and also rose from 3 cents reported a year ago.
Total quarterly revenues of $52,238 million surpassed the Zacks Consensus Estimate of $42,111 million. Also, the top line increased from $30,185 million in the year-ago quarter.
The strong quarterly earnings were driven by higher realizations of commodity prices and stronger refining business.
BP p.l.c. Price, Consensus and EPS Surprise
BP p.l.c. price-consensus-eps-surprise-chart | BP p.l.c. Quote
Share Repurchases
The integrated energy major announced that before declaring results for the January-end quarter, it has intended to execute an additional $1.5 billion of share repurchases. The company anticipates buying back $1 billion worth of shares every quarter, considering Brent crude price at $60 per barrel.
Operational Performance
Oil Production & Operations:
In the fourth quarter, BP reported total production of 1,358 thousand barrels of oil equivalent per day (MBoe/d), almost flat from 1,359 MBoe/d in the year-ago quarter.
BP sold liquids at $71.07 a barrel in the fourth quarter compared with $38.58 in the prior-year period. It sold natural gas at $9.27 per thousand cubic feet compared with $2.38 in the year-ago quarter. Overall price realization rose to $66.94 per Boe from the year-ago level of $33.18.
After adjusting for non-operating items, underlying replacement cost earnings before interest and tax for the segment amounted to $4,024 million. The figure jumped from earnings of $563 million in the year-ago quarter. Higher commodity price realizations primarily caused the upside.
Gas & Low Carbon Energy:
Segmental profits totaled $2,211 million, improving from earnings of $154 million in the year-ago quarter, primarily led by increased oil equivalent production and price, and higher production.
In the fourth quarter, the total production of 974 thousand barrels of oil equivalent per day (MBoe/d) improved from 796 MBoe/d in the year-ago quarter. Key project start-ups primarily contributed to the production.
Customers & Products:
After adjusting for non-operating items, underlying replacement cost earnings before interest and tax for the segment amounted to $611 million, up significantly from $126 million in the year-ago quarter. A favorable refining business aided the segment.
BP-operated refining availability for the December-end quarter was reported at 95.4%, reflecting a decline from 96.1% in the year-ago quarter. Total refinery throughputs from the fourth quarter were reported at 1,644 thousand barrels per day (MBbl/D), improving from 1,628 MBbl/D in the prior-year quarter.
Rosneft:
Earnings from the segment amounted to $745 million, suggesting an increase from $311 million in the December-end quarter of 2020. Higher oil prices aided the segment’s results.
Capex
Organic capital expenditure for the reported quarter was recorded at $3,512 million. The company reported total capital spending for the quarter at $3,633 million.
Financials
BP's net debt, including leases, was $39,411 million at the end of the fourth quarter versus $48,196 million in the prior-year quarter. Gearing was recorded at 30.4% compared with 36% in the prior-year quarter.
Outlook
For 2022, BP expects a capital expenditure of $14-15 billion. It continues to expect $14-16 billion per annum through 2025.
The company expects upstream production to remain flat year over year in 2022. For the first quarter of the year, the company projects a sequential decline in upstream production due to a base decline and higher maintenance.
Moreover, BP expects to receive $2-3 billion of divestment and other proceeds this year.
Zacks Rank & Stocks to Consider
The company currently carries a Zacks Rank #3 (Hold).
Investors interested in the energy sector might look at the following stocks that presently sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
ConocoPhillips (COP - Free Report) , based in Houston, TX, is primarily involved in the exploration and production of oil and natural gas. COP recently reported fourth-quarter 2021 adjusted earnings per share of $2.27, comfortably beating the Zacks Consensus Estimate of $2.20.
ConocoPhillips’ earnings for 2022 are expected to soar 62.1% year over year. COP reported preliminary 2021 year-end proved reserves at 6.1 billion Boe. COP added its total reserve replacement ratio at 377%. As of Dec 31, 2021, ConocoPhillips had $5,028 million in total cash and cash equivalents.
RPC, Inc. (RES - Free Report) is among the leading providers of advanced oilfield services and equipment to almost all prospective oil and gas plays in the United States. RPC reported adjusted earnings of 6 cents per share for the fourth quarter of 2021, beating the Zacks Consensus Estimate of 3 cents.
RPC is expected to see an earnings growth of 1066.7% in 2022. As of Dec 31, RPC had cash and cash equivalents of $82.4 million, up sequentially from $80.8 million. Nonetheless, RPC managed to maintain a debt-free balance sheet.
Marathon Petroleum Corporation (MPC - Free Report) is a leading independent refiner, transporter and marketer of petroleum products. MPC reported fourth-quarter 2021 adjusted earnings of $1.30 per share, which comfortably beat the Zacks Consensus Estimate of 47 cents.
Marathon Petroleum is expected to see an earnings growth of 129.8% in 2022. As of Dec 31, MPC had cash and cash equivalents of $5.3 billion. Marathon Petroleum repurchased shares worth $3 billion in the October-January period and has now completed around 55% of its target to buy back $10 billion in common stock. Further planning to reward its shareholders, MPC announced a $5-billion buyback program.