Energy
Tuesday, October 31st, 2023 1:55 pm EDT
Key Points
- BP’s Profits Fall: BP reported a significant year-on-year drop in profits for the third quarter, with an underlying replacement cost profit of $3.293 billion. This marked a decline from $8.15 billion during the same period the previous year.
- Analyst Expectations Missed: The reported profits fell short of analyst estimates, with expectations of $4.059 billion for the third quarter. This resulted in a 20% net profit miss according to analyst estimates.
- Factors Affecting Performance: While there was some growth in the quarter due to increased oil and gas production, higher refining margins, and a strong oil trading result, these gains were partially offset by weak performance in gas marketing and trading. The company also highlighted impairments of $1.2 billion, including a $540 million impairment charge related to U.S. offshore wind projects. Despite these challenges, BP announced a $1.5 billion share buyback to be executed ahead of its fourth-quarter results.
BP, the British energy giant, reported a steep year-on-year fall in profits for the third quarter, missing analyst estimates. The company’s underlying replacement cost profit, used as a proxy for net profit, was $3.293 billion, down from $8.15 billion in the same period the previous year but an increase from the $2.59 billion profit recorded in the second quarter. Analysts had expected profit to be $4.059 billion for the quarter.
Quarterly growth for BP came from increased oil and gas production, higher refining margins, and a strong oil trading result, although this was offset by weak gas marketing and trading. The company also reported impairments of $1.2 billion, including a pre-tax $540 million impairment charge related to U.S. offshore wind projects.
BP’s capital expenditure for the quarter was $3.603 billion, and it announced a $1.5 billion share buyback to be executed ahead of the fourth-quarter results. The company expects production restrictions from OPEC members and demand rebound to support oil prices but anticipates significantly lower industry refining margins in the fourth quarter.
The results come at a time of uncertainty in BP’s leadership, with the sudden departure of CEO Bernard Looney and the interim role being filled by CFO Murray Auchincloss. BP’s U.S. boss, Dave Lawler, also announced his resignation. The third-quarter results were considered disappointing by some analysts.
For the full original article on CNBC, please click here: https://www.cnbc.com/2023/10/31/oil-major-bp-misses-estimates-for-third-quarter-as-profits-plummet.html
