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BP Q4 Earnings Miss Estimates on Lower Refinery Throughput
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BP plc (BP - Free Report) reported fourth-quarter 2020 adjusted earnings of 3 cents per American Depositary Share (ADS) on a replacement cost basis, excluding non-operating items. The bottom line missed the Zacks Consensus Estimate of earnings of 12 cents per share and also decreased from the year-ago earnings of 76 cents.
Total revenues of $48,568 million fell from $72,170 million in the year-ago quarter but beat the Zacks Consensus Estimate of $45,307 million.
The weak quarterly earnings were owing to lower oil equivalent production and prices. Reduced refinery throughput also led to the underperformance. This reflects that the coronavirus pandemic severely hurt the energy sector by slashing world-wide fuel demand.
BP did not carry out any share repurchase program in the fourth quarter. Only in the first quarter of 2020, it bought back 120 million ordinary shares for $776 million.
Dividend
The company, which cut its dividend in half in August, announced a quarterly dividend of 31.5 cents per ADS, which will be paid on Mar 26.
BP’s Operational Performance
Upstream:
For the fourth quarter, total production of 2,155thousand barrels of oil equivalent per day (MBoe/d) declined from 2,698MBoe/d in the year-ago quarter. Production was curtailed by hurricanes in the U.S. Gulf of Mexico and lower capital investments.
BP sold liquids at $38.42 a barrel in the fourth quarter compared with $55.90 in the prior-year period. Moreover, it sold natural gas at $3.10 per thousand cubic feet compared with $3.12 in the year-ago quarter. Overall price realization fell to $28.48 per Boe from the year-ago level of $36.42.
After adjusting for non-operating items and fair value accounting effects, underlying replacement cost earnings before interest and tax for the segment amounted to $697 million. The figure deteriorated significantly from $2,678 million in the year-ago quarter. Although the December quarter witnessed recovering fuel demand and improving commodity prices, a year-over-year drop in realized prices from oil equivalent barrels of liquids and production volumes primarily caused the downside.
Downstream:
Segmental profits plunged to $126 million from $1,438 million in the year-ago quarter, primarily due to lower refinery throughput.
Refining marker margin of $5.9 per barrel for the fourth quarter was lower than the year-earlier quarter’s $12.4. Moreover, total refinery throughput decreased to 1,628 thousand barrels a day (MBbls/d) from 1,847 MBbls/d in the prior-year quarter. The company’s refinery throughputs in both the United States and Europe declined.
Total sales volumes of refined products fell to 5,255 MBbls/d from 6,263 MBbls/d in the year-ago period. Refining availability rose marginally to 96.1% for the quarter from the year-ago level of 95.7%.
Rosneft:
Earnings from the segment amounted to $311 million declined from the year-ago adjusted profit of $412 million due to drop in oil prices.
Oil Spill Costs & Capex
Through 2020, the integrated energy firm made a payment of $1.6 billion — after tax — associated with the oil spill incident in the Gulf of Mexico. Notably, organic capital expenditure for 2020 was recorded at $12 billion.
Financials
BP's net debt — including leases — was $48,196million at fourth quarter-end, lower than $55,006 million in the prior-year quarter. Gearing was recorded at 36% compared with 35.3% in the prior-year quarter.
Other News
On Feb 1, the company announced its agreement with PTT Exploration and Production Public Company Limited to divest a 20% stake in Oman's Block 61. Notably, the transaction has been valued at $2.6 billion. However, in the block, BP will continue to be the operator with ownership stake of 40%.
Outlook
The British energy giant expects underlying production in 2021 to be higher marginally than 2020, thanks to production ramp-up from key projects. Moreover, in the March quarter of 2021, the integrated energy firm projects a sequential rise in production.
However, the company foresees a cloudy outlook for the industry refining margins and utilization in the first quarter of 2021. Notably, in 2021, the company expects $4 billion to $6 billion of proceeds from divestments and disposals.
Zacks Rank & Key Picks
BP currently carries a Zacks Rank #3 (Hold). Meanwhile, some better-ranked players in the energy space include Matador Resources Company (MTDR - Free Report) , DCP Midstream, LP and Diamondback Energy, Inc. (FANG - Free Report) . While Diamondback carries a Zacks Rank #2 (Buy), Matador and DCP Midstream sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Matador is likely to see earnings growth of 201.3% in 2021.
DCP Midstream has seen upward estimate revisions for 2021 earnings in the past 30 days.
Diamondback is likely to see earnings growth of 55% in 2021.
Zacks Names “Single Best Pick to Double
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.
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BP Q4 Earnings Miss Estimates on Lower Refinery Throughput
BP plc (BP - Free Report) reported fourth-quarter 2020 adjusted earnings of 3 cents per American Depositary Share (ADS) on a replacement cost basis, excluding non-operating items. The bottom line missed the Zacks Consensus Estimate of earnings of 12 cents per share and also decreased from the year-ago earnings of 76 cents.
Total revenues of $48,568 million fell from $72,170 million in the year-ago quarter but beat the Zacks Consensus Estimate of $45,307 million.
The weak quarterly earnings were owing to lower oil equivalent production and prices. Reduced refinery throughput also led to the underperformance. This reflects that the coronavirus pandemic severely hurt the energy sector by slashing world-wide fuel demand.
BP p.l.c. Price, Consensus and EPS Surprise
BP p.l.c. price-consensus-eps-surprise-chart | BP p.l.c. Quote
No Share Repurchases
BP did not carry out any share repurchase program in the fourth quarter. Only in the first quarter of 2020, it bought back 120 million ordinary shares for $776 million.
Dividend
The company, which cut its dividend in half in August, announced a quarterly dividend of 31.5 cents per ADS, which will be paid on Mar 26.
BP’s Operational Performance
Upstream:
For the fourth quarter, total production of 2,155thousand barrels of oil equivalent per day (MBoe/d) declined from 2,698MBoe/d in the year-ago quarter. Production was curtailed by hurricanes in the U.S. Gulf of Mexico and lower capital investments.
BP sold liquids at $38.42 a barrel in the fourth quarter compared with $55.90 in the prior-year period. Moreover, it sold natural gas at $3.10 per thousand cubic feet compared with $3.12 in the year-ago quarter. Overall price realization fell to $28.48 per Boe from the year-ago level of $36.42.
After adjusting for non-operating items and fair value accounting effects, underlying replacement cost earnings before interest and tax for the segment amounted to $697 million. The figure deteriorated significantly from $2,678 million in the year-ago quarter. Although the December quarter witnessed recovering fuel demand and improving commodity prices, a year-over-year drop in realized prices from oil equivalent barrels of liquids and production volumes primarily caused the downside.
Downstream:
Segmental profits plunged to $126 million from $1,438 million in the year-ago quarter, primarily due to lower refinery throughput.
Refining marker margin of $5.9 per barrel for the fourth quarter was lower than the year-earlier quarter’s $12.4. Moreover, total refinery throughput decreased to 1,628 thousand barrels a day (MBbls/d) from 1,847 MBbls/d in the prior-year quarter. The company’s refinery throughputs in both the United States and Europe declined.
Total sales volumes of refined products fell to 5,255 MBbls/d from 6,263 MBbls/d in the year-ago period. Refining availability rose marginally to 96.1% for the quarter from the year-ago level of 95.7%.
Rosneft:
Earnings from the segment amounted to $311 million declined from the year-ago adjusted profit of $412 million due to drop in oil prices.
Oil Spill Costs & Capex
Through 2020, the integrated energy firm made a payment of $1.6 billion — after tax — associated with the oil spill incident in the Gulf of Mexico. Notably, organic capital expenditure for 2020 was recorded at $12 billion.
Financials
BP's net debt — including leases — was $48,196million at fourth quarter-end, lower than $55,006 million in the prior-year quarter. Gearing was recorded at 36% compared with 35.3% in the prior-year quarter.
Other News
On Feb 1, the company announced its agreement with PTT Exploration and Production Public Company Limited to divest a 20% stake in Oman's Block 61. Notably, the transaction has been valued at $2.6 billion. However, in the block, BP will continue to be the operator with ownership stake of 40%.
Outlook
The British energy giant expects underlying production in 2021 to be higher marginally than 2020, thanks to production ramp-up from key projects. Moreover, in the March quarter of 2021, the integrated energy firm projects a sequential rise in production.
However, the company foresees a cloudy outlook for the industry refining margins and utilization in the first quarter of 2021. Notably, in 2021, the company expects $4 billion to $6 billion of proceeds from divestments and disposals.
Zacks Rank & Key Picks
BP currently carries a Zacks Rank #3 (Hold). Meanwhile, some better-ranked players in the energy space include Matador Resources Company (MTDR - Free Report) , DCP Midstream, LP and Diamondback Energy, Inc. (FANG - Free Report) . While Diamondback carries a Zacks Rank #2 (Buy), Matador and DCP Midstream sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Matador is likely to see earnings growth of 201.3% in 2021.
DCP Midstream has seen upward estimate revisions for 2021 earnings in the past 30 days.
Diamondback is likely to see earnings growth of 55% in 2021.
Zacks Names “Single Best Pick to Double
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.
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