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BP Beats Q3 Earnings Estimates, Projects $3B Oil Spill Cost
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BP plc (BP - Free Report) reported third-quarter 2018 adjusted earnings of $1.15 per American Depositary Share (ADS) on a replacement cost basis, excluding non-operating items. The bottom line surpassed the Zacks Consensus Estimate of 86 cents and improved from the year-ago quarter’s 57 cents.
Total revenues were $80,803 million in the quarter, up from $60,808 million in the year-ago quarter.
The increase in oil equivalent price realizations and ramped-up key upstream projects drove strong third-quarter results. This also led the stock to gain more than 4% during pre-trading hours.
The integrated energy major continued to return cash to shareholders through buybacks and dividend payments. Through third-quarter 2018, BP spent $139 million on the repurchase of 19 million shares.
Operational Performance
Upstream
In the third quarter, total production of 2.460 million barrels of oil equivalent per day (MMBoe/d) remains where it was a year ago. Ramp-up in key developments backed the quarterly production volumes.
The company sold liquids at $69.68 a barrel in the third quarter as compared with $47.45 a year ago. It sold natural gas at $3.86 per thousand cubic feet, compared with $2.89 a year ago. Overall price realization increased to $46.14 per barrels of oil equivalent (Boe) from the year-ago level of $33.23.
After adjusting for non-operating items and fair value accounting effects, underlying replacement cost profit before interest and tax for the segment was $3,999 million, up from $1,562 million a year ago. Increased realized prices from oil and natural gas primarily drove the upside.
Downstream
Segmental profits declined to $2,111 million from $2,338 million in the year-ago quarter. Lower contributions from fuels and lubricants businesses led to the downstream underperformance.
Refining marker margin of $14.7 per barrel in the third quarter of 2018 was lower than 16.3 in the year-earlier quarter. However, total refinery throughput increased to 1,793 thousand barrels a day (MB/d) from 1,745 MB/d in the year-earlier quarter.
Refining availability was 96.3%, compared with 95.3% in the year-ago quarter.
Rosneft
The segment recorded profits of $872 million, up from $137 million a year ago.
Financials
BP's net debt was $39,177 million at the end of the third quarter, lower than $39,777 million a year ago. Net debt ratio was 27.5%, below 28.4% in the prior-year quarter.
Oil Spill Costs
Through the nine months of 2018, the integrated energy firm made a payment of $2.9 billion, after tax, associated with the oil spill incident in the Gulf of Mexico. For 2018, BP continues to expect total payment to be slightly higher than $3 billion.
Outlook
For the October-to-December quarter of 2018, the company expects oil and natural gas production to be rise sequentially. BP added that the turnaround works will hurt refining margins in fourth-quarter 2018.
Zacks Rank & Other Stocks to Consider
BP carries a Zacks Rank #2 (Buy). Other prospective players in the energy space are Murphy Oil Corporation (MUR - Free Report) , Enbridge Inc (ENB - Free Report) and Petroleo Brasileiro S.A. or Petrobras (PBR - Free Report) . While Murphy and Enbridge sport a Zacks Rank #1 (Strong Buy), Petrobras carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Murphy has an average positive surprise of 96.5% for the last four quarters.
Enbridge will likely see earnings growth of 42.2% in 2018.
Petrobras’ bottom line beat the Zacks Consensus Estimate in three of the trailing four quarters, the average being 10.4%.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce ""the world's first trillionaires,"" but that should still leave plenty of money for regular investors who make the right trades early.
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BP Beats Q3 Earnings Estimates, Projects $3B Oil Spill Cost
BP plc (BP - Free Report) reported third-quarter 2018 adjusted earnings of $1.15 per American Depositary Share (ADS) on a replacement cost basis, excluding non-operating items. The bottom line surpassed the Zacks Consensus Estimate of 86 cents and improved from the year-ago quarter’s 57 cents.
Total revenues were $80,803 million in the quarter, up from $60,808 million in the year-ago quarter.
The increase in oil equivalent price realizations and ramped-up key upstream projects drove strong third-quarter results. This also led the stock to gain more than 4% during pre-trading hours.
The integrated energy major continued to return cash to shareholders through buybacks and dividend payments. Through third-quarter 2018, BP spent $139 million on the repurchase of 19 million shares.
Operational Performance
Upstream
In the third quarter, total production of 2.460 million barrels of oil equivalent per day (MMBoe/d) remains where it was a year ago. Ramp-up in key developments backed the quarterly production volumes.
The company sold liquids at $69.68 a barrel in the third quarter as compared with $47.45 a year ago. It sold natural gas at $3.86 per thousand cubic feet, compared with $2.89 a year ago. Overall price realization increased to $46.14 per barrels of oil equivalent (Boe) from the year-ago level of $33.23.
After adjusting for non-operating items and fair value accounting effects, underlying replacement cost profit before interest and tax for the segment was $3,999 million, up from $1,562 million a year ago. Increased realized prices from oil and natural gas primarily drove the upside.
Downstream
Segmental profits declined to $2,111 million from $2,338 million in the year-ago quarter. Lower contributions from fuels and lubricants businesses led to the downstream underperformance.
Refining marker margin of $14.7 per barrel in the third quarter of 2018 was lower than 16.3 in the year-earlier quarter. However, total refinery throughput increased to 1,793 thousand barrels a day (MB/d) from 1,745 MB/d in the year-earlier quarter.
Refining availability was 96.3%, compared with 95.3% in the year-ago quarter.
Rosneft
The segment recorded profits of $872 million, up from $137 million a year ago.
Financials
BP's net debt was $39,177 million at the end of the third quarter, lower than $39,777 million a year ago. Net debt ratio was 27.5%, below 28.4% in the prior-year quarter.
Oil Spill Costs
Through the nine months of 2018, the integrated energy firm made a payment of $2.9 billion, after tax, associated with the oil spill incident in the Gulf of Mexico. For 2018, BP continues to expect total payment to be slightly higher than $3 billion.
Outlook
For the October-to-December quarter of 2018, the company expects oil and natural gas production to be rise sequentially. BP added that the turnaround works will hurt refining margins in fourth-quarter 2018.
Zacks Rank & Other Stocks to Consider
BP carries a Zacks Rank #2 (Buy). Other prospective players in the energy space are Murphy Oil Corporation (MUR - Free Report) , Enbridge Inc (ENB - Free Report) and Petroleo Brasileiro S.A. or Petrobras (PBR - Free Report) . While Murphy and Enbridge sport a Zacks Rank #1 (Strong Buy), Petrobras carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Murphy has an average positive surprise of 96.5% for the last four quarters.
Enbridge will likely see earnings growth of 42.2% in 2018.
Petrobras’ bottom line beat the Zacks Consensus Estimate in three of the trailing four quarters, the average being 10.4%.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce ""the world's first trillionaires,"" but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>