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BP Beats Q2 Earnings Estimates, Hikes Quarterly Dividend
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BP plc (BP - Free Report) has reported second-quarter 2024 adjusted earnings of $1 per American Depositary Share on a replacement-cost basis, excluding non-operating items. The bottom line beat the Zacks Consensus Estimate of 92 cents and improved from the 89 cents reported a year ago.
Total quarterly revenues of $48.3 billion lagged the Zacks Consensus Estimate of $63.2 billion and declined from the $49.5 billion reported in the year-ago quarter.
Higher volumes and improved liquids realizations primarily led to strong quarterly earnings. Increased total refinery throughputs also aided quarterly earnings.
BP has declared an interim dividend of 8 cents per ordinary share. The payment is scheduled for Sep 20, 2024, and will be made to ordinary shareholders and American Depositary Share (ADS) holders who are registered as of Aug 9, 2024. This represents a 10% hike from the last dividend payout.
Operational Performance
Oil Production & Operations:
For the second quarter, BP reported a total production of 1,481 thousand barrels of oil equivalent per day (Mboe/d), up from the 1,369 MBoe/d recorded in the year-ago quarter. The metric also beat our estimate of 1,354.5 MBoe/d.
BP sold liquids at $73.01 per barrel in the second quarter, up from the $69.19 reported in the prior-year period. The reported figure lagged our estimate of $76.85.
The company sold natural gas at $2.02 per thousand cubic feet, declining from the $3.23 reported in the year-ago quarter and missing our estimate of $3.03.
Overall hydrocarbon price realization increased year over year to $55.78 per Boe from $54.57, but lagged our estimate of $65.51.
After adjusting for non-operating items, underlying replacement cost earnings before interest and tax for the segment amounted to $3.1 billion. The figure improved from the $2.8 billion recorded in the year-ago quarter and surpassed our estimate of $2.6 billion. The upside primarily resulted from higher volumes, improved liquids realizations and reduced exploration write-offs, partially offset by higher depreciation charges and increased costs.
Gas & Low Carbon Energy:
Segmental profits totaled $1.4 billion, significantly down from the $2.2 billion registered in the year-ago quarter primarily due to lower gas marketing and trading results. The negatives were partially offset by reduced depreciation, depletion and amortization charges. The figure also missed our projection of $2.5 billion.
In the second quarter, the total production of 899 MBoe/d declined from 903 MBoe/d in the year-ago quarter.
Customers & Products:
After adjusting for non-operating items, underlying replacement cost earnings before interest and tax for the segment amounted to $1.1 billion, up from $0.8 billion in the year-ago quarter. The figure also surpassed our projection of $1 billion. Higher refining throughputs aided the segment.
BP-operated refining availability in the June-end quarter was 96.4%, indicating an increase from 95.7% in the year-ago quarter.
Total refinery throughputs from the second quarter were 1,392 thousand barrels per day (MBbl/D), up from 1,364 MBbl/D in the corresponding period of 2023. The figure beat our estimate of 1,354.8 MBbl/D.
Capex
Organic capital expenditure in the reported quarter totaled $3.6 million. The company reported a total capital spending of $3.7 billion for the quarter.
Financials
BP's net debt was $22.6 billion at the end of the second quarter. Also, the firm announced a gearing of 21.6% in the second quarter.
Outlook
BP said that its upstream production on a reported basis for the third quarter of 2024 would be lower than that in the second quarter. However, for 2024, the company expects both reported and underlying upstream production to exceed the levels recorded in the previous year.
For 2024, BP allocated a capital expenditure budget of $16 billion, with an expected even distribution between the first and second halves of the year. The company also anticipates a modest year-over-year increase in its depreciation, depletion and amortization expenses.
BP plans to generate $2-$3 billion from divestments and other financial transactions in 2024. This effort is part of a broader goal to achieve $25 billion in divestments from the second half of 2020 through 2025.
Zacks Rank & Stocks to Consider
BP currently carries a Zacks Rank #5 (Strong Sell).
Sunoco is a leading wholesale motor fuel distributor in the United States, boasting a vast distribution network spanning 40 states. With long-term contracts servicing more than 10,000 convenience stores, it distributes above 10 fuel brands, ensuring a stable revenue stream. SUN currently has a Value and Growth Score of A.
The Zacks Consensus Estimate for 2024 and 2025 earnings per unit is pegged at $7.29 and $7.26, respectively. The partnership has witnessed upward earnings estimate revisions for 2025 in the past 60 days.
SM Energy is set to expand its oil-centered operations in the coming years, with an increasing focus on crude oil, especially in the Permian Basin and Eagle Ford regions. The company’s attractive oil and gas investments should create long-term value for shareholders.
The Zacks Consensus Estimate for SM’s 2024 EPS is pegged at $7.09 and $8.66, respectively. The company has a Zacks Style Score of A for Value. It has witnessed upward earnings estimate revisions for 2024 in the past 30 days.
Hess is a leading oil and natural gas exploration and production company that made several world-class oil discoveries in the Stabroek Block, located off the coast of Guyana. The company is currently in the process of being acquired by supermajor Chevron in an all-stock deal worth $53 billion. The merger will likely result in the creation of an energy behemoth with a massive portfolio of producing assets.
The Zacks Consensus Estimate for HES’s 2024 EPS is pegged at $11.08 and $12.78, respectively. The company has a Zacks Style Score of A for Growth and Momentum. It has witnessed upward earnings estimate revisions for 2024 and 2025 in the past seven days.
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BP Beats Q2 Earnings Estimates, Hikes Quarterly Dividend
BP plc (BP - Free Report) has reported second-quarter 2024 adjusted earnings of $1 per American Depositary Share on a replacement-cost basis, excluding non-operating items. The bottom line beat the Zacks Consensus Estimate of 92 cents and improved from the 89 cents reported a year ago.
Total quarterly revenues of $48.3 billion lagged the Zacks Consensus Estimate of $63.2 billion and declined from the $49.5 billion reported in the year-ago quarter.
Higher volumes and improved liquids realizations primarily led to strong quarterly earnings. Increased total refinery throughputs also aided quarterly earnings.
BP p.l.c. Price, Consensus and EPS Surprise
BP p.l.c. price-consensus-eps-surprise-chart | BP p.l.c. Quote
Dividend Hike
BP has declared an interim dividend of 8 cents per ordinary share. The payment is scheduled for Sep 20, 2024, and will be made to ordinary shareholders and American Depositary Share (ADS) holders who are registered as of Aug 9, 2024. This represents a 10% hike from the last dividend payout.
Operational Performance
Oil Production & Operations:
For the second quarter, BP reported a total production of 1,481 thousand barrels of oil equivalent per day (Mboe/d), up from the 1,369 MBoe/d recorded in the year-ago quarter. The metric also beat our estimate of 1,354.5 MBoe/d.
BP sold liquids at $73.01 per barrel in the second quarter, up from the $69.19 reported in the prior-year period. The reported figure lagged our estimate of $76.85.
The company sold natural gas at $2.02 per thousand cubic feet, declining from the $3.23 reported in the year-ago quarter and missing our estimate of $3.03.
Overall hydrocarbon price realization increased year over year to $55.78 per Boe from $54.57, but lagged our estimate of $65.51.
After adjusting for non-operating items, underlying replacement cost earnings before interest and tax for the segment amounted to $3.1 billion. The figure improved from the $2.8 billion recorded in the year-ago quarter and surpassed our estimate of $2.6 billion. The upside primarily resulted from higher volumes, improved liquids realizations and reduced exploration write-offs, partially offset by higher depreciation charges and increased costs.
Gas & Low Carbon Energy:
Segmental profits totaled $1.4 billion, significantly down from the $2.2 billion registered in the year-ago quarter primarily due to lower gas marketing and trading results. The negatives were partially offset by reduced depreciation, depletion and amortization charges. The figure also missed our projection of $2.5 billion.
In the second quarter, the total production of 899 MBoe/d declined from 903 MBoe/d in the year-ago quarter.
Customers & Products:
After adjusting for non-operating items, underlying replacement cost earnings before interest and tax for the segment amounted to $1.1 billion, up from $0.8 billion in the year-ago quarter. The figure also surpassed our projection of $1 billion. Higher refining throughputs aided the segment.
BP-operated refining availability in the June-end quarter was 96.4%, indicating an increase from 95.7% in the year-ago quarter.
Total refinery throughputs from the second quarter were 1,392 thousand barrels per day (MBbl/D), up from 1,364 MBbl/D in the corresponding period of 2023. The figure beat our estimate of 1,354.8 MBbl/D.
Capex
Organic capital expenditure in the reported quarter totaled $3.6 million. The company reported a total capital spending of $3.7 billion for the quarter.
Financials
BP's net debt was $22.6 billion at the end of the second quarter. Also, the firm announced a gearing of 21.6% in the second quarter.
Outlook
BP said that its upstream production on a reported basis for the third quarter of 2024 would be lower than that in the second quarter. However, for 2024, the company expects both reported and underlying upstream production to exceed the levels recorded in the previous year.
For 2024, BP allocated a capital expenditure budget of $16 billion, with an expected even distribution between the first and second halves of the year. The company also anticipates a modest year-over-year increase in its depreciation, depletion and amortization expenses.
BP plans to generate $2-$3 billion from divestments and other financial transactions in 2024. This effort is part of a broader goal to achieve $25 billion in divestments from the second half of 2020 through 2025.
Zacks Rank & Stocks to Consider
BP currently carries a Zacks Rank #5 (Strong Sell).
Investors interested in the energy sector may look at some better-ranked stocks like Sunoco LP (SUN - Free Report) , SM Energy Company (SM - Free Report) and Hess Corporation (HES - Free Report) . Sunoco and SM Energy currently sport a Zacks Rank #1 (Strong Buy) each, and Hess carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Sunoco is a leading wholesale motor fuel distributor in the United States, boasting a vast distribution network spanning 40 states. With long-term contracts servicing more than 10,000 convenience stores, it distributes above 10 fuel brands, ensuring a stable revenue stream. SUN currently has a Value and Growth Score of A.
The Zacks Consensus Estimate for 2024 and 2025 earnings per unit is pegged at $7.29 and $7.26, respectively. The partnership has witnessed upward earnings estimate revisions for 2025 in the past 60 days.
SM Energy is set to expand its oil-centered operations in the coming years, with an increasing focus on crude oil, especially in the Permian Basin and Eagle Ford regions. The company’s attractive oil and gas investments should create long-term value for shareholders.
The Zacks Consensus Estimate for SM’s 2024 EPS is pegged at $7.09 and $8.66, respectively. The company has a Zacks Style Score of A for Value. It has witnessed upward earnings estimate revisions for 2024 in the past 30 days.
Hess is a leading oil and natural gas exploration and production company that made several world-class oil discoveries in the Stabroek Block, located off the coast of Guyana. The company is currently in the process of being acquired by supermajor Chevron in an all-stock deal worth $53 billion. The merger will likely result in the creation of an energy behemoth with a massive portfolio of producing assets.
The Zacks Consensus Estimate for HES’s 2024 EPS is pegged at $11.08 and $12.78, respectively. The company has a Zacks Style Score of A for Growth and Momentum. It has witnessed upward earnings estimate revisions for 2024 and 2025 in the past seven days.