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BP Q2 Earnings Beat Estimates on Strong Refining Margins & Pricing
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Key Takeaways
BP's Q2 2026 earnings topped estimates as refining margins, hydrocarbon realizations and trading improved.
BP's refining indicator margin surged to $29.60 per barrel, lifting Customers & Products earnings.
BP reduced net debt to $22.25 billion and raised its 2026 capital spending outlook to $13.5-$14 billion.
BP p.l.c. (BP - Free Report) reported second-quarter 2026 adjusted earnings of $2.22 per American Depositary share (ADS), up 146.7% from 90 cents per ADS a year ago. The bottom line beat the Zacks Consensus Estimate of $1.98 per ADS by 12.1%.
Total revenues and other income increased 47.1% to $70.11 billion from $47.68 billion a year earlier. The top line surpassed the consensus mark of $64.32 billion by 9%.
The strong quarterly results were driven by higher refining margins, improved hydrocarbon price realizations and increased trading. Upstream production declined 4.3% to 2.201 million barrels of oil equivalent per day (MMBoe/d).
Underlying replacement-cost profit attributable to shareholders increased to $5.73 billion from $2.35 billion in the year-ago quarter. Underlying replacement-cost profit before interest and tax nearly doubled to $10.31 billion from $5.25 billion.
Customers & Products was the main earnings driver. The segment’s underlying replacement-cost profit before interest and tax reached $4.95 billion, up from $1.53 billion a year earlier. The products business benefited from significantly higher realized refining margins, reduced turnaround activity and a stronger oil-trading contribution.
BP Realizations Offset Lower Upstream Volumes
Gas and Low Carbon Energy production declined 2.2% to 765 thousand barrels of oil equivalent per day (Mboe/d). Its total hydrocarbon realization increased to $52.82 per barrel of oil equivalent from $40.84 per barrel of oil equivalent, supported by higher liquids and natural gas pricing.
Oil Production and Operations output fell 5.4% to 1,436 Mboe/d. Total hydrocarbon realizations increased to $62.18 per barrel from $49.03 per barrel. Liquids realizations rose to $84.10 per barrel from $59.74 per barrel, while natural gas realizations declined to $2.16 per thousand cubic feet from $3.66 per thousand cubic feet.
The segment’s underlying replacement-cost profit before interest and tax rose to $3.58 billion from $2.26 billion. Higher liquids realizations and increased income from equity-accounted entities more than offset lower production and higher exploration write-offs.
BP's Refining Margins Drive Products Earnings
BP’s average refining indicator margin increased sharply to $29.60 per barrel from $11.90 per barrel in the prior-year quarter. Refinery throughput rose 13.9% to 1,467 thousand barrels per day, despite declining from 1,527 thousand barrels per day in the preceding quarter.
BP-operated refining availability was 94.7%, down from 96.4% a year ago. Total refined-product sales declined to 3.16 million barrels per day (MMBbl/d) from 3.20 MMBbl/d, although trading and supply volumes increased.
The customers' business also delivered stronger results, aided by improved fuels and midstream performance and higher Castrol earnings. These positives were partly offset by lower fuels volumes and a reduced contribution from bioenergy.
BP Cash Flow Supports Debt Reduction
Operating cash flow increased 73.2% to $10.86 billion, despite a $1.02 billion adjusted working-capital build. Underlying cash generation totaled $12.89 billion during the quarter.
Capital expenditure declined to $3.09 billion from $3.36 billion. BP also received $609 million in divestment and other proceeds, compared with $1.36 billion in the prior-year period.
Net debt decreased to $22.25 billion at quarter-end from $26.04 billion a year earlier and $25.31 billion at the end of the first quarter. Total financial obligations and instruments, including net debt, hybrid capital, leases and Gulf of America settlement liabilities, declined by $6.9 billion sequentially.
BP Raises Dividend
BP increased its quarterly dividend by 4% to 8.660 cents per ordinary share. The company expects ADS holders to receive 51.96 cents per ADS.
BP Updates Q3 & 2026 Guidance
For the third quarter of 2026, BP projects upstream production to be in the range of 2.1-2.25 MMBoe/d. The outlook incorporates continued Middle East disruptions, lower ownership in Latin America and a potential weather impact of about 40 thousand barrels of oil equivalent per day in the Gulf of America.
BP expects full-year reported upstream production to be between 2.18 MMBoe/d and 2.27 MMBoe/d. Products throughput is forecast in the range of 1.36-1.41 MMBbl/d.
The company raised its 2026 capital expenditure outlook to $13.5-$14 billion from the prior $13-$13.5 billion range. Divestment and other proceeds are expected to be between $8 billion and $9 billion, including approximately $6 billion from the planned Castrol transaction.
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BP Q2 Earnings Beat Estimates on Strong Refining Margins & Pricing
Key Takeaways
BP p.l.c. (BP - Free Report) reported second-quarter 2026 adjusted earnings of $2.22 per American Depositary share (ADS), up 146.7% from 90 cents per ADS a year ago. The bottom line beat the Zacks Consensus Estimate of $1.98 per ADS by 12.1%.
Total revenues and other income increased 47.1% to $70.11 billion from $47.68 billion a year earlier. The top line surpassed the consensus mark of $64.32 billion by 9%.
The strong quarterly results were driven by higher refining margins, improved hydrocarbon price realizations and increased trading. Upstream production declined 4.3% to 2.201 million barrels of oil equivalent per day (MMBoe/d).
BP p.l.c. Price, Consensus and EPS Surprise
BP p.l.c. price-consensus-eps-surprise-chart | BP p.l.c. Quote
BP's Profit Mix Benefits From Downstream Strength
Underlying replacement-cost profit attributable to shareholders increased to $5.73 billion from $2.35 billion in the year-ago quarter. Underlying replacement-cost profit before interest and tax nearly doubled to $10.31 billion from $5.25 billion.
Customers & Products was the main earnings driver. The segment’s underlying replacement-cost profit before interest and tax reached $4.95 billion, up from $1.53 billion a year earlier. The products business benefited from significantly higher realized refining margins, reduced turnaround activity and a stronger oil-trading contribution.
BP Realizations Offset Lower Upstream Volumes
Gas and Low Carbon Energy production declined 2.2% to 765 thousand barrels of oil equivalent per day (Mboe/d). Its total hydrocarbon realization increased to $52.82 per barrel of oil equivalent from $40.84 per barrel of oil equivalent, supported by higher liquids and natural gas pricing.
Oil Production and Operations output fell 5.4% to 1,436 Mboe/d. Total hydrocarbon realizations increased to $62.18 per barrel from $49.03 per barrel. Liquids realizations rose to $84.10 per barrel from $59.74 per barrel, while natural gas realizations declined to $2.16 per thousand cubic feet from $3.66 per thousand cubic feet.
The segment’s underlying replacement-cost profit before interest and tax rose to $3.58 billion from $2.26 billion. Higher liquids realizations and increased income from equity-accounted entities more than offset lower production and higher exploration write-offs.
BP's Refining Margins Drive Products Earnings
BP’s average refining indicator margin increased sharply to $29.60 per barrel from $11.90 per barrel in the prior-year quarter. Refinery throughput rose 13.9% to 1,467 thousand barrels per day, despite declining from 1,527 thousand barrels per day in the preceding quarter.
BP-operated refining availability was 94.7%, down from 96.4% a year ago. Total refined-product sales declined to 3.16 million barrels per day (MMBbl/d) from 3.20 MMBbl/d, although trading and supply volumes increased.
The customers' business also delivered stronger results, aided by improved fuels and midstream performance and higher Castrol earnings. These positives were partly offset by lower fuels volumes and a reduced contribution from bioenergy.
BP Cash Flow Supports Debt Reduction
Operating cash flow increased 73.2% to $10.86 billion, despite a $1.02 billion adjusted working-capital build. Underlying cash generation totaled $12.89 billion during the quarter.
Capital expenditure declined to $3.09 billion from $3.36 billion. BP also received $609 million in divestment and other proceeds, compared with $1.36 billion in the prior-year period.
Net debt decreased to $22.25 billion at quarter-end from $26.04 billion a year earlier and $25.31 billion at the end of the first quarter. Total financial obligations and instruments, including net debt, hybrid capital, leases and Gulf of America settlement liabilities, declined by $6.9 billion sequentially.
BP Raises Dividend
BP increased its quarterly dividend by 4% to 8.660 cents per ordinary share. The company expects ADS holders to receive 51.96 cents per ADS.
BP Updates Q3 & 2026 Guidance
For the third quarter of 2026, BP projects upstream production to be in the range of 2.1-2.25 MMBoe/d. The outlook incorporates continued Middle East disruptions, lower ownership in Latin America and a potential weather impact of about 40 thousand barrels of oil equivalent per day in the Gulf of America.
BP expects full-year reported upstream production to be between 2.18 MMBoe/d and 2.27 MMBoe/d. Products throughput is forecast in the range of 1.36-1.41 MMBbl/d.
The company raised its 2026 capital expenditure outlook to $13.5-$14 billion from the prior $13-$13.5 billion range. Divestment and other proceeds are expected to be between $8 billion and $9 billion, including approximately $6 billion from the planned Castrol transaction.
BP’s Zacks Rank & Key Picks
BP currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the energy sector are PBF Energy Inc. (PBF - Free Report) , HF Sinclair Corporation (DINO - Free Report) and Cactus, Inc. (WHD - Free Report) . PBF sports a Zacks Rank #1 (Strong Buy), while DINO and WHD carry a Zacks Rank #2 (Buy) each, at present. You can see the complete list of today’s Zacks Rank #1 stocks here.
PBF reported second-quarter 2026 adjusted earnings of $6.22 per share, surpassing the Zacks Consensus Estimate of $4.05 per share.
As of June 30, 2026, PBF had total debt of $1.75 billion, and cash and cash equivalents of $894.1 million.
HF Sinclair reported second-quarter 2026 adjusted earnings of $5.31 per share, topping the Zacks Consensus Estimate of $4.39 per share.
As of June 30, 2026, DINO had total debt of $2.77 billion, and cash and cash equivalents of $2.26 billion.
Cactus reported second-quarter 2026 adjusted earnings of 93 cents per share, surpassing the Zacks Consensus Estimate of 71 cents per share.