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BP plc (BP) Beats Q1 Earnings on Improved Crude Prices
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British energy giant BP plc (BP - Free Report) reported strong first-quarter 2017 results, primarily owing to higher liquid and gas prices realizations. Ramp up of projects during the quarter also supported the outperformance.
The company reported first-quarter adjusted earnings of 46 cents per American Depositary Share (ADS) on a replacement cost basis, excluding non-operating items. The bottom line surpassed the Zacks Consensus Estimate of 38 cents and also improved from the year-ago earnings of 17 cents.
BP's total revenue was $56,386 million in the quarter. Revenues not only increased from the year-ago level of $39,166 million but also topped the Zacks Consensus Estimate of $53,466 million.
Operational Performance
Upstream
For the first quarter, total production inched up 3% year over year to 2.388 million barrels of oil equivalent per day (MMBoe/d). Key project ramp ups primarily drove the upside.
The company sold liquids at $49.87 per barrel in the first quarter as against $29.61 in the year-earlier quarter. It sold natural gas at $3.50 per thousand cubic feet compared with $2.84 a year ago. Overall price realization increased to $37.19 per Boe from the year-ago level of $23.81 per Boe.
After adjusting for non-operating items and fair value accounting effects, underlying replacement cost profit before interest and tax for the segment was $1,370 million. This compares favorably with a loss of $747 million incurred in the year-ago quarter. The improvement was driven by increased liquid and gas price realizations as well as higher production.
Downstream
Segmental profits fell to $1,742 million from $1,813 million in the year-ago quarter. The deterioration is attributable to decreased refinery throughput.
Refining Marker margin increased to $11.7 per barrel from $10.5 per barrel in the first quarter of 2016. Total refinery throughput decreased to 1,676 thousand barrels per day (MB/d) from 1,744 MB/d in the year-earlier period. Refining availability was 95.2% compared with 95% in the year-ago period.
Rosneft
The Rosneft segment includes equity-accounted earnings from associates owing to BP’s stake in the former. The segment reported profits of $99 million compared with $66 million in the year-ago quarter.
Financials
BP's net debt was $38,635 million at the end of the first quarter compared with $29,996 million in the year-ago quarter. Net debt-to-capitalization ratio was 28% as against 23.6% a year ago.
Outlook
BP expects production during second-quarter 2017 to be flat with the January–March quarter of this year due to the persistent ramp up of key developments. However, maintenance works and seasonal turnaround activities may limit the upside.
For second-quarter 2017, the company anticipates higher refining margin than first-quarter 2017. However, the turnaround activities during the April–June quarter of 2017 are likely to increase, partially offsetting the improvement in refining margin.
First-Quarter Share Price Performance
During the first three months of this year, BP’s shares underperformed the Zacks categorized Oil & Gas-International Integrated industry. During the aforesaid period, shares of the company lost 7.7% compared with a 5.1% decrease for the broader industry.
Zacks Rank
Currently, BP carries a Zacks Rank #5 (Strong Sell). Some better-ranked players from the energy sector are McDermott International Inc. , W&T Offshore Inc. (WTI - Free Report) and Bellatrix Exploration Ltd. . McDermott and Bellatrix Exploration sport a Zacks Rank #1 (Strong Buy), while W&T Offshore carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
McDermott beat the Zacks Consensus Estimate in each of the trailing four quarters with an average positive surprise of 387.50%.
W&T Offshore had an average positive earnings surprise of 50.53% in the last four quarters.
Bellatrix Exploration surpassed the Zacks Consensus Estimate in three of the last four quarters with an average positive earnings surprise of 58.54%.
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BP plc (BP) Beats Q1 Earnings on Improved Crude Prices
British energy giant BP plc (BP - Free Report) reported strong first-quarter 2017 results, primarily owing to higher liquid and gas prices realizations. Ramp up of projects during the quarter also supported the outperformance.
The company reported first-quarter adjusted earnings of 46 cents per American Depositary Share (ADS) on a replacement cost basis, excluding non-operating items. The bottom line surpassed the Zacks Consensus Estimate of 38 cents and also improved from the year-ago earnings of 17 cents.
BP's total revenue was $56,386 million in the quarter. Revenues not only increased from the year-ago level of $39,166 million but also topped the Zacks Consensus Estimate of $53,466 million.
Operational Performance
Upstream
For the first quarter, total production inched up 3% year over year to 2.388 million barrels of oil equivalent per day (MMBoe/d). Key project ramp ups primarily drove the upside.
The company sold liquids at $49.87 per barrel in the first quarter as against $29.61 in the year-earlier quarter. It sold natural gas at $3.50 per thousand cubic feet compared with $2.84 a year ago. Overall price realization increased to $37.19 per Boe from the year-ago level of $23.81 per Boe.
After adjusting for non-operating items and fair value accounting effects, underlying replacement cost profit before interest and tax for the segment was $1,370 million. This compares favorably with a loss of $747 million incurred in the year-ago quarter. The improvement was driven by increased liquid and gas price realizations as well as higher production.
Downstream
Segmental profits fell to $1,742 million from $1,813 million in the year-ago quarter. The deterioration is attributable to decreased refinery throughput.
Refining Marker margin increased to $11.7 per barrel from $10.5 per barrel in the first quarter of 2016. Total refinery throughput decreased to 1,676 thousand barrels per day (MB/d) from 1,744 MB/d in the year-earlier period. Refining availability was 95.2% compared with 95% in the year-ago period.
Rosneft
The Rosneft segment includes equity-accounted earnings from associates owing to BP’s stake in the former. The segment reported profits of $99 million compared with $66 million in the year-ago quarter.
Financials
BP's net debt was $38,635 million at the end of the first quarter compared with $29,996 million in the year-ago quarter. Net debt-to-capitalization ratio was 28% as against 23.6% a year ago.
Outlook
BP expects production during second-quarter 2017 to be flat with the January–March quarter of this year due to the persistent ramp up of key developments. However, maintenance works and seasonal turnaround activities may limit the upside.
For second-quarter 2017, the company anticipates higher refining margin than first-quarter 2017. However, the turnaround activities during the April–June quarter of 2017 are likely to increase, partially offsetting the improvement in refining margin.
First-Quarter Share Price Performance
During the first three months of this year, BP’s shares underperformed the Zacks categorized Oil & Gas-International Integrated industry. During the aforesaid period, shares of the company lost 7.7% compared with a 5.1% decrease for the broader industry.
Zacks Rank
Currently, BP carries a Zacks Rank #5 (Strong Sell). Some better-ranked players from the energy sector are McDermott International Inc. , W&T Offshore Inc. (WTI - Free Report) and Bellatrix Exploration Ltd. . McDermott and Bellatrix Exploration sport a Zacks Rank #1 (Strong Buy), while W&T Offshore carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
McDermott beat the Zacks Consensus Estimate in each of the trailing four quarters with an average positive surprise of 387.50%.
W&T Offshore had an average positive earnings surprise of 50.53% in the last four quarters.
Bellatrix Exploration surpassed the Zacks Consensus Estimate in three of the last four quarters with an average positive earnings surprise of 58.54%.
5 Trades Could Profit ""Big-League"" from Trump Policies
If the stocks above spark your interest, wait until you look into companies primed to make substantial gains from Washington's changing course.
Today Zacks reveals 5 tickers that could benefit from new trends like streamlined drug approvals, tariffs, lower taxes, higher interest rates, and spending surges in defense and infrastructure. See these buy recommendations now >>