Why Energy Giant BP Shares Are Falling Today

BP PLC BP shares are trading lower by around 4% after the company reported Q3 FY23 results.

Sales and other operating revenues came in at $53.27 billion, missing the consensus of $57.71 billion.

Production was 946 mboe/d (-3.6% Y/Y), with underlying production down 2.6% Y/Y due to lower base performance and increased planned maintenance.

The Renewables pipeline stood at 43.9GW (bp net), including 17.7GW bp net share of Lightsource BP's pipeline. 

Adjusted EBITDA declined to $10.31 billion from $17.41 billion a year ago. 

Underlying RC profit per American Depositary Share (ADS) came in at $1.15, missing the consensus of $1.38. 

Operating cash flow was $8.75 billion, compared to $8.29 billion in the prior-year quarter. Capital expenditure increased to $3.60 billion from $3.19 billion a year ago.

Net debt stood at $22.32 billion vs. $22.00 billion a year ago.

"This has been a solid quarter supported by strong underlying operational performance demonstrating our continued focus on delivery. Momentum continues to build across our businesses, with recent start-ups including Tangguh Expansion, bpx energy's 'Bingo' central processing facility and Archaea Energy's first modular biogas plant in Indiana," said Murray Auchincloss, interim CEO.

Also Read: BP To Sell Stake In Its US Oil And Gas Pipeline Network & Raise About $1B: Report

Dividend: BP announced a dividend per share of 7.270 cents, payable to common shareholders and ADS holders on December 19, 2023, with a record date of November 10, 2023.

Repurchase: During the quarter, the company completed $1.5 billion of share buybacks. BP plans to execute a further $1.5 billion share buyback before reporting Q4 results.

Q4 FY23 Outlook: BP expects reported upstream production to be broadly flat compared to Q3 FY23. 

BP expects seasonally higher volumes in its customers' business along with significantly lower realized margins and a higher level of turnaround activity in refining in Q4.

FY23 Outlook: BP continues to expect both reported and underlying upstream production to be higher compared with 2022. The company projects capital expenditure (including inorganic capital expenditure) to be around $16 billion in FY23.

At around $60 per barrel Brent and subject to the board's discretion each quarter, BP intends to deliver share buybacks of about $4.0 billion per annum and sees a capacity for an annual dividend per share of about 4%.

BP has increased FY30 adjusted EBITDA resilient hydrocarbons and group guidance by $2 billion to $41 billion-$44 billion and $53 billion-$58 billion, respectively.

Also Read: BP Buys $100M Worth Of Tesla Superchargers For Third-Party Network Expansion

In another development, BP plans to reportedly form joint ventures around its U.S. onshore natural gas fields to boost production and cut costs, as per Reuters.

Price Action: BP shares are down 3.65% at $36.95 premarket on the last check Tuesday.