This post was originally published on this site

Dow Jones Stock Market Today – BP 1Q Profit Rose More Than Expected; Launches $500 Million Share Buyback — Update

–BP’s profit rose above expectations in the first quarter, helped by the recovery in energy prices

–The company flagged an exceptional gas marketing and trading performance

–A $500 million buyback is being launched after net debt was cut below the $35 billion target

 

By Jaime Llinares Taboada

 

BP PLC on Tuesday posted better-than-expected earnings for the first quarter of the year, reflecting stronger oil and gas prices, and said it is launching a $500 million share buyback in the second quarter.

The British oil major made a net profit of $4.67 billion for the three months ended March 31, up from $1.36 billion for the fourth quarter of 2020 and swinging from a $4.36 billion net loss for the first quarter of 2020.

Underlying replacement cost profit came in at $2.63 billion, well above the $1.64 billion market consensus–compiled by the company from 23 brokers. Underlying RC profit is a similar metric to the net profit figure that U.S. oil companies use, but strips out one-off items.

Total production fell 12% year-on-year to 3.27 million oil-equivalent barrels a day, reflecting asset sales. However, BP said it benefited from an exceptional gas marketing and trading performance in the period, as well as significantly higher oil prices and higher refining margins.

Brent oil averaged $61 a barrel in the first quarter, up from $44 in October-December and $50 a year earlier. “This quarter demonstrates what we mean by performing while transforming,” Chief Executive Bernard Looney said.

BP on Tuesday also confirmed it has achieved its target of reducing net debt below $35 billion. Net debt closed the quarter at $33.3 billion. As a result, the company is starting a $500 million share buyback in the second quarter to offset expected full-year dilution from the vesting of awards under employee share programs, it said.

BP said it will provide an update on its third quarter buyback plans when it releases its second-quarter results. This will take into account the surplus cash flow from the first half of 2021 and the outlook for surplus cash flow, it said.

The company declared a dividend of 5.25 cents a share for the first quarter, in line with the fourth quarter of 2020 and down from 10.50 cents a year earlier.

BP said the oil market is set to continue rebalancing in 2021, as global stocks decline and demand recovers, driven by the U.S. and China. The company forecast its 2021 upstream production will be lower than in 2020 due to asset sales, and reaffirmed capital expenditure guidance at around $13 billion. In addition, full-year disposal proceeds are expected to reach $5 billion-$6 billion.

ADVERTISEMENT

 

Write to Jaime Llinares Taboada at jaime.llinares@Fintech Zoom.com; @JaimeLlinaresT

 

(END) Dow Jones Newswires

April 27, 2021 03:02 ET (07:02 GMT)

Copyright (c) 2021 Dow Jones & Company, Inc.

Dow Jones Stock Market Today – BP 1Q Profit Rose More Than Expected; Launches $500 Million Share Buyback — Update