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BP Lags Q1 Earnings & Revenue Estimates, Maintains Dividend
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BP plc (BP - Free Report) reported first-quarter 2020 adjusted earnings of 24 cents per American Depositary Share (ADS) on a replacement cost basis, excluding non-operating items. The bottom line missed the Zacks Consensus Estimate of 28 cents and deteriorated from the year-ago quarter’s 70 cents.
Total revenues of $59,540 million declined from $67,407 million in the year-ago quarter and missed the Zacks Consensus Estimate of $64,430 million.
The weakness in first-quarter results is largely a reflection of a drop in oil equivalent production, commodity prices and refining marker margin. In particular, the coronavirus pandemic, which dented global energy demand, has hurt the company’s upstream and downstream business.
The company bought back 120 million ordinary shares in the first quarter for $776 million.
Moreover, with the raising of the dividend payout in the fourth quarter, the company has maintained quarterly dividend at 63 cents per ADS, which will be paid on Jun 19. When many leading energy firms are considering a cut in dividend payouts amid the coronavirus outbreak, the company’s decision to maintain dividends is worth appreciating.
BP’s Operational Performance
Upstream:
In the first quarter, total production of 2.579 million barrels of oil equivalent per day (MMBoe/d) declined from 2.656 MMBoe/d in the year-ago quarter.
The company sold liquids at $47.47 a barrel in the first quarter compared with $56.47 in the prior-year period. Moreover, it sold natural gas at $2.83 per thousand cubic feet compared with $4.02 in the year-ago quarter. Overall price realization fell to $31.80 per Boe from the year-ago level of $39.37.
After adjusting for non-operating items and fair value accounting effects, underlying replacement cost profit before interest and tax for the segment amounted to $1,871 million. The figure deteriorated from $2,928 million in the year-ago quarter. Lower realized prices from oil equivalent barrels of liquids primarily caused the downside.
Downstream:
Segmental profits declined to $921 million from $1,733 million in the year-ago quarter due to lower refining marker margin.
Refining marker margin of $8.8 per barrel in the first quarter was lower than the year-earlier quarter’s $10.2. However, total refinery throughput increased to 1,806 thousand barrels a day (MBbls/d) from 1,739 MBbls/d in the prior-year quarter. Notably, the company’s refinery throughputs in the United States and Europe rose, while the same declined in the rest of the world.
Total sales volumes of refined products marginally rose to 5,888 MBbls/d from 5,886 MBbls/d in the year-ago period. Refining availability was 96.1% compared with 94.3% a year ago.
Rosneft:
Loss at from the segment amounted to $17 million against the year-ago adjusted profit of $567 million. The decline was primarily caused by the downward spiraling of oil prices.
Oil Spill Costs & Capex
Through the March quarter, the integrated energy firm made a payment of $281 million, after tax, associated with the oil spill incident in the Gulf of Mexico. Notably, organic capital expenditure in the quarter was recorded at $3.5 billion.
Financials
BP's net debt — including leases — was $60,618 million at the end of the first quarter, higher than $55,075 million in the prior-year quarter. Gearing was recorded at 36.2% compared with 30.4% in the prior-year quarter.
Outlook
BP expects production volumes to decline sequentially in the second quarter of 2020. Since the coronavirus pandemic has hurt worldwide energy demand, the company expects refinery utilizations to decline in the June quarter.
In 2020, the company expects Gulf of Mexico oil spill payments to be less than $1 billion. Moreover, the integrated firm has revised its organic capital spending budget for 2020 downward by 25% to $12 billion.
Zacks Rank & Stocks to Consider
BP currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the energy sector includeLilis Energy, Inc. , Southwestern Energy Company (SWN - Free Report) and Comstock Resources, Inc. (CRK - Free Report) . While Lilis Energy sports a Zacks Rank #1 (Strong Buy), Southwestern Energy and Comstock Resources carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Lilis Energy has witnessed upward estimate revisions for 2020 bottom line in the past 60 days.
Southwestern Energy has an average positive earnings surprise of 22% for the past four quarters.
Comstock has surpassed the Zacks Consensus Estimate for earnings in the past two reported quarters.
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Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 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 Lags Q1 Earnings & Revenue Estimates, Maintains Dividend
BP plc (BP - Free Report) reported first-quarter 2020 adjusted earnings of 24 cents per American Depositary Share (ADS) on a replacement cost basis, excluding non-operating items. The bottom line missed the Zacks Consensus Estimate of 28 cents and deteriorated from the year-ago quarter’s 70 cents.
Total revenues of $59,540 million declined from $67,407 million in the year-ago quarter and missed the Zacks Consensus Estimate of $64,430 million.
The weakness in first-quarter results is largely a reflection of a drop in oil equivalent production, commodity prices and refining marker margin. In particular, the coronavirus pandemic, which dented global energy demand, has hurt the company’s upstream and downstream 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 Repurchase & Dividend
The company bought back 120 million ordinary shares in the first quarter for $776 million.
Moreover, with the raising of the dividend payout in the fourth quarter, the company has maintained quarterly dividend at 63 cents per ADS, which will be paid on Jun 19. When many leading energy firms are considering a cut in dividend payouts amid the coronavirus outbreak, the company’s decision to maintain dividends is worth appreciating.
BP’s Operational Performance
Upstream:
In the first quarter, total production of 2.579 million barrels of oil equivalent per day (MMBoe/d) declined from 2.656 MMBoe/d in the year-ago quarter.
The company sold liquids at $47.47 a barrel in the first quarter compared with $56.47 in the prior-year period. Moreover, it sold natural gas at $2.83 per thousand cubic feet compared with $4.02 in the year-ago quarter. Overall price realization fell to $31.80 per Boe from the year-ago level of $39.37.
After adjusting for non-operating items and fair value accounting effects, underlying replacement cost profit before interest and tax for the segment amounted to $1,871 million. The figure deteriorated from $2,928 million in the year-ago quarter. Lower realized prices from oil equivalent barrels of liquids primarily caused the downside.
Downstream:
Segmental profits declined to $921 million from $1,733 million in the year-ago quarter due to lower refining marker margin.
Refining marker margin of $8.8 per barrel in the first quarter was lower than the year-earlier quarter’s $10.2. However, total refinery throughput increased to 1,806 thousand barrels a day (MBbls/d) from 1,739 MBbls/d in the prior-year quarter. Notably, the company’s refinery throughputs in the United States and Europe rose, while the same declined in the rest of the world.
Total sales volumes of refined products marginally rose to 5,888 MBbls/d from 5,886 MBbls/d in the year-ago period. Refining availability was 96.1% compared with 94.3% a year ago.
Rosneft:
Loss at from the segment amounted to $17 million against the year-ago adjusted profit of $567 million. The decline was primarily caused by the downward spiraling of oil prices.
Oil Spill Costs & Capex
Through the March quarter, the integrated energy firm made a payment of $281 million, after tax, associated with the oil spill incident in the Gulf of Mexico. Notably, organic capital expenditure in the quarter was recorded at $3.5 billion.
Financials
BP's net debt — including leases — was $60,618 million at the end of the first quarter, higher than $55,075 million in the prior-year quarter. Gearing was recorded at 36.2% compared with 30.4% in the prior-year quarter.
Outlook
BP expects production volumes to decline sequentially in the second quarter of 2020. Since the coronavirus pandemic has hurt worldwide energy demand, the company expects refinery utilizations to decline in the June quarter.
In 2020, the company expects Gulf of Mexico oil spill payments to be less than $1 billion. Moreover, the integrated firm has revised its organic capital spending budget for 2020 downward by 25% to $12 billion.
Zacks Rank & Stocks to Consider
BP currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the energy sector includeLilis Energy, Inc. , Southwestern Energy Company (SWN - Free Report) and Comstock Resources, Inc. (CRK - Free Report) . While Lilis Energy sports a Zacks Rank #1 (Strong Buy), Southwestern Energy and Comstock Resources carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Lilis Energy has witnessed upward estimate revisions for 2020 bottom line in the past 60 days.
Southwestern Energy has an average positive earnings surprise of 22% for the past four quarters.
Comstock has surpassed the Zacks Consensus Estimate for earnings in the past two reported quarters.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 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 >>