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BP Tops Q3 Earnings Estimates, Announces New $1.25B Buyback
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BP plc (BP - Free Report) reported third-quarter 2021 adjusted earnings of 99 cents 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 96 cents per share and also surged from the year-ago profit of 3 cents.
Total revenues of $37,867 million increased from $26,263 million in the year-ago quarter but missed the Zacks Consensus Estimate of $39,233 million.
The strong quarterly earnings were driven by higher realizations of commodity prices and a stronger refining business.
The integrated energy major announced that before declaring results for the December quarter, it has intended to execute an additional $1.25 billion of share repurchases. The company continues to anticipate that it will buy back $1 billion shares by every quarter, considering Brent crude price at $60 per barrel.
On the dividend front, the company projects a hike in annual dividend per ordinary share of 4% through 2025.
Operational Performance
Oil Production & Operations:
In the third quarter, total production of 1,313 thousand barrels of oil equivalent per day (MBoe/d) fell from 1,402 MBoe/d in the year-ago quarter.
BP sold liquids at $65.53 a barrel in the third quarter compared with $38.21 in the prior-year period. It sold natural gas at $5.61 per thousand cubic feet compared with $1.42 in the year-ago quarter. Overall price realization rose to $57.72 per Boe from the year-ago level of $31.21.
After adjusting for non-operating items, underlying replacement cost earnings before interest and tax for the segment amounted to $2,461 million. The figure jumped from earnings of $367 million in the year-ago quarter. Higher realized commodity prices primarily caused the upside.
Gas & Low Carbon Energy:
Segmental profits totaled $1,807 million, improving from earnings of $502 million in the year-ago quarter, primarily led by increased oil equivalent production and price.
In the third quarter, total production of 889 thousand barrels of oil equivalent per day (MBoe/d) improved from 841 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 $1,158 million, up from $636 million in the year-ago quarter. A favorable refining business aided the segment.
BP-operated refining availability for the September quarter was reported at 95.6%, reflecting a decline from 96.2% in the year-ago quarter. Total refinery throughputs from the third quarter were reported at 1,622 thousand barrels per day (MBbl/D), improving from 1,587 MBbl/D in the prior-year quarter.
Rosneft:
Earnings from the segment amounted to $923 million, comparing favorably with the loss of $177 million in the September quarter of 2020. Higher oil prices aided the segment results.
Capex
Organic capital expenditure for the third quarter of 2021 was recorded at $2,850 million. The company reported total capital spending for the quarter at $2,903 million.
Financials
BP's net debt — including leases — was $40,710 million at third quarter-end versus $49,620 million in the prior-year quarter. Gearing was recorded at 31.3% compared with 37.7% in the prior-year quarter.
Outlook
The British energy giant expects oil prices to continue to improve, thanks to a drawdown in inventory levels. Additional demand since there has been a switch to oil from gas is also backing the commodity’s price.
Owing to the ongoing divestment program, the company expects upstream production to decline year over year in 2021. For 2021, the company reaffirmed its projection for capital spending at around $13 billion.
For the fourth quarter of this year, BP projects a sequential rise in upstream production on the ramping up of key projects.
Zacks Rank & Other Stocks to Consider
The company sports a Zacks Rank #1 (Strong Buy). Other prospective stocks from the energy space include Whiting Petroleum Corporation , Comstock Resources, Inc. (CRK - Free Report) and APA Corporation (APA - Free Report) . While Comstock carries a Zacks Rank #2 (Buy), Whiting Petroleum and APA Corporation sport a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Whiting Petroleum has witnessed upward earnings estimate revisions for 2021 in the past 30 days.
Comstock is expected to witness earnings growth of 378.3% in 2021.
APA has seen upward earnings estimate revisions for 2021 in the past 30 days.
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BP Tops Q3 Earnings Estimates, Announces New $1.25B Buyback
BP plc (BP - Free Report) reported third-quarter 2021 adjusted earnings of 99 cents 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 96 cents per share and also surged from the year-ago profit of 3 cents.
Total revenues of $37,867 million increased from $26,263 million in the year-ago quarter but missed the Zacks Consensus Estimate of $39,233 million.
The strong quarterly earnings were driven by higher realizations of commodity prices and a 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 December quarter, it has intended to execute an additional $1.25 billion of share repurchases. The company continues to anticipate that it will buy back $1 billion shares by every quarter, considering Brent crude price at $60 per barrel.
On the dividend front, the company projects a hike in annual dividend per ordinary share of 4% through 2025.
Operational Performance
Oil Production & Operations:
In the third quarter, total production of 1,313 thousand barrels of oil equivalent per day (MBoe/d) fell from 1,402 MBoe/d in the year-ago quarter.
BP sold liquids at $65.53 a barrel in the third quarter compared with $38.21 in the prior-year period. It sold natural gas at $5.61 per thousand cubic feet compared with $1.42 in the year-ago quarter. Overall price realization rose to $57.72 per Boe from the year-ago level of $31.21.
After adjusting for non-operating items, underlying replacement cost earnings before interest and tax for the segment amounted to $2,461 million. The figure jumped from earnings of $367 million in the year-ago quarter. Higher realized commodity prices primarily caused the upside.
Gas & Low Carbon Energy:
Segmental profits totaled $1,807 million, improving from earnings of $502 million in the year-ago quarter, primarily led by increased oil equivalent production and price.
In the third quarter, total production of 889 thousand barrels of oil equivalent per day (MBoe/d) improved from 841 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 $1,158 million, up from $636 million in the year-ago quarter. A favorable refining business aided the segment.
BP-operated refining availability for the September quarter was reported at 95.6%, reflecting a decline from 96.2% in the year-ago quarter. Total refinery throughputs from the third quarter were reported at 1,622 thousand barrels per day (MBbl/D), improving from 1,587 MBbl/D in the prior-year quarter.
Rosneft:
Earnings from the segment amounted to $923 million, comparing favorably with the loss of $177 million in the September quarter of 2020. Higher oil prices aided the segment results.
Capex
Organic capital expenditure for the third quarter of 2021 was recorded at $2,850 million. The company reported total capital spending for the quarter at $2,903 million.
Financials
BP's net debt — including leases — was $40,710 million at third quarter-end versus $49,620 million in the prior-year quarter. Gearing was recorded at 31.3% compared with 37.7% in the prior-year quarter.
Outlook
The British energy giant expects oil prices to continue to improve, thanks to a drawdown in inventory levels. Additional demand since there has been a switch to oil from gas is also backing the commodity’s price.
Owing to the ongoing divestment program, the company expects upstream production to decline year over year in 2021. For 2021, the company reaffirmed its projection for capital spending at around $13 billion.
For the fourth quarter of this year, BP projects a sequential rise in upstream production on the ramping up of key projects.
Zacks Rank & Other Stocks to Consider
The company sports a Zacks Rank #1 (Strong Buy). Other prospective stocks from the energy space include Whiting Petroleum Corporation , Comstock Resources, Inc. (CRK - Free Report) and APA Corporation (APA - Free Report) . While Comstock carries a Zacks Rank #2 (Buy), Whiting Petroleum and APA Corporation sport a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Whiting Petroleum has witnessed upward earnings estimate revisions for 2021 in the past 30 days.
Comstock is expected to witness earnings growth of 378.3% in 2021.
APA has seen upward earnings estimate revisions for 2021 in the past 30 days.