BP Stock Drops As Q3 Revenue Misses Mark, Production Declines & Debt Rises

BP PLC BP shares are trading lower after the company reported third-quarter results.

Sales and other operating revenues came in at $47.254 billion, missing the consensus of $52.557 billion.

Hydrocarbon production was 890 mboe/d (-6.0% Y/Y), with underlying production declining 4.0% Y/Y mainly due to base decline.

The Renewables pipeline stood at 46.8GW (bp net), including a 20.5GW bp net share from Lightsource bp's (LSbp's) pipeline in the quarter. 

Adjusted EBITDA declined to $9.65 billion from $10.31 billion a year ago. Underlying RC profit per American Depositary Share (ADS) came in at $0.83, beating the consensus of $0.76. 

Operating cash flow was $6.76 billion, compared to $8.75 billion in the prior-year quarter. 

Capital expenditure was $4.54 billion versus $3.60 billion a year ago. Net debt rose to $24.27 billion from $22.32 billion a year ago.

Read: BP Warns Of Weaker Refining Margins, Higher Debt: Details

Chief executive officer Murray Auchincloss said, “We have made significant progress since we laid out our six priorities earlier this year to make bp simpler, more focused and higher value. In oil and gas, we see the potential to grow through the decade with a focus on value over volume.”

”We also have a deep belief in the opportunity afforded by the energy transition – we have established a number of leading positions and will continue high-grading our investments to ensure they compete with the rest of our business.”

Dividend: BP disclosed an interim dividend of 8.000 cents per ordinary share, payable on December 20, 2024. Holders of ADSs are expected to receive $0.48 per ADS.

Repurchase: The company completed previously announced $1.75 billion in share buybacks during the quarter.

Furthermore, BP plans to conduct a $1.75 billion share buyback before its fourth-quarter earnings release and is committed to an additional $1.75 billion buyback for the fourth quarter of 2024.

Fourth-Quarter FY24 Outlook: BP anticipates upstream production to be lower than the third quarter of 2024.

In its customer business, BP projects seasonally lower volumes sequentially in the fourth quarter, with fuel margins likely remaining sensitive to supply cost fluctuations.

In the products segment, BP expects refining margins to stay low in the fourth quarter, though they may remain sensitive to changes in product crack spreads.

FY24 Guidance: BP continues to expect both reported and underlying upstream production to be slightly higher than the prior year. 

It now anticipates divestments and other proceeds to be greater than $3 billion (vs. $2 billion – $3 billion earlier) for the year.

Meanwhile, BP continues to expect $25 billion of divestments and other proceeds from the second half of 2020 through 2025.

For 2024, BP expects capital expenditure of around $16 billion per annum.

In September, BP inked a deal under which Apollo Global Management managed funds will acquire a non-controlling stake in BP Pipelines TAP Limited for around $1 billion.

Investors can gain exposure to the stock via Donoghue Forlines Yield Enhanced Real Asset ETF DFRA and First Trust Exchange-Traded Fund IV FT Energy Income Partners Strategy ETF (ARCA: EIPX).

Price Action: BP shares are down 2.93% at $30.14 premarket at the last check Tuesday.

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