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Highlights
BP reports an underlying replacement cost profit of $2.3 billion for Q3, exceeding analyst expectations.
The company announces a $1.75 billion share buyback, maintaining a commitment to return cash to shareholders.
BP's shares have declined 14 percent year-to-date amid falling oil prices and changes in production pledges.
BP, (LSE:BP) the FTSE 100 oil giant, has reported stronger-than-anticipated earnings for the third quarter, posting an underlying replacement cost profit of $2.3 billion for the three months ending September 30. This figure surpasses analyst expectations, which had estimated a profit of $2.1 billion, according to data compiled by LSEG. However, the profit reflects a decline from the $2.8 billion reported in the second quarter of 2024 and is significantly lower than the $3.3 billion achieved in the same quarter last year.
In conjunction with its earnings report, BP announced a share buyback program valued at $1.75 billion, reinforcing its commitment to returning capital to shareholders. The company also stated plans for an additional $1.75 billion in buybacks for the current financial year and reiterated a goal to return $14 billion to shareholders via buybacks in 2025, subject to prevailing market conditions.
Despite these positive earnings, BP's shares have fallen 14 percent year-to-date, largely due to a decline in oil prices from multi-year highs observed in the aftermath of the pandemic and following the onset of the conflict in Ukraine. Oil prices dropped sharply at the start of the week, with Brent crude trading down by as much as six percent on Monday, eventually settling at $71.42 a barrel. This marks a notable decrease compared to approximately $90 per barrel one year ago.
The results coincide with BP's decision to reduce its commitments to curtail oil and gas production by 2030. CEO Murray Auchincloss emphasized the progress made since outlining six strategic priorities earlier in the year, aimed at making BP simpler, more focused, and of higher value. Auchincloss expressed confidence in the potential for growth in oil and gas over the coming decade, with a strong belief in the opportunities presented by the energy transition. The company is focused on optimizing investments to ensure competitiveness across its various business sectors, with a clear commitment to enhancing BP’s overall value.
