BP's Mixed Q2 Results: EPS Tops Estimates, Production Challenges, Raised Dividend & More

BP PLC BP shares are trading higher after the company reported second-quarter FY24 results.

Sales and other operating revenues came in at $47.299 billion, missing the consensus of $52.925 billion.

Hydrocarbon production was 899 mboe/d (-0.5% Y/Y), with underlying production rising 0.4% Y/Y mainly due to ramp-up of major projects, partly offset by base decline.

The Renewables pipeline stood at 59.0GW (bp net), including a 21.1GW bp net share from Lightsource bp’s (LSbp’s) pipeline in the quarter. 

Adjusted EBITDA declined to $9.64 billion from $9.77 billion a year ago. Underlying RC profit per American Depositary Share (ADS) came in at $1.00, beating the consensus of $0.92. 

Operating cash flow was $8.10 billion, compared to $6.29 billion in the prior-year quarter. Capital expenditure was $3.69 billion versus $4.31 billion a year ago. Net debt fell to $22.61 billion from $23.66 billion a year ago.

Chief executive officer Murray Auchincloss said, “We are driving focus across the business and reducing costs, all while building momentum in our drive to 2025. Our recent go-ahead of the Kaskida development in the Gulf of Mexico business, and decision to take full ownership of bp Bunge Bioenergia while scaling back plans for new biofuels projects, demonstrate our commitment to delivering as a simpler, more focused and higher value company.”

Dividend: BP has announced a 10% increase in its interim dividend to 8.000 cents per ordinary share, payable on September 20, 2024. Holders of ADSs are expected to receive $0.48 per ADS.

Related: BP’s Q2 Estimates Downgraded, But This Analyst Anticipates 10% Dividend Hike And Continued Buybacks

Repurchase: The company completed $1.75 billion in share buybacks during the quarter. Furthermore, BP is committed to announcing $3.5 billion for the second half of 2024.

Third-Quarter FY24 Outlook: BP anticipates that the third quarter’s reported upstream production will be lower than the second quarter of 2024, including in higher margin regions. In its customers business, BP expects fuels margins to remain sensitive to movements in cost of supply and seasonally higher volumes on a sequential basis.

Read: BP Faces $3B Hit in 2Q24 Amid Refining Challenges & Low Demand

FY24 Guidance: BP continues to expect both reported and underlying upstream production to be slightly higher Y/Y in FY23. 

It continues to expect divestments and other proceeds to total $2 billion to $3 billion for the year and to reach $25 billion from the second half of 2020 through 2025.

For 2024 and 2025, BP expects capital expenditure of around $16 billion per annum.

Investors can gain exposure to the stock via Direxion Hydrogen ETF (ARCA: HJEN) and First Trust Exchange-Traded Fund IV FT Energy Income Partners Strategy ETF (ARCA: EIPX).

Also Read: BP Joins Audi’s F1 Grid: The Race for Sustainable Motorsport Heats Up

Price Action: BP shares are trading higher by 1.14% at $35.36 premarket at the last check Tuesday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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