BP plc (BP) profit at 10-year high, buys back US$6 billion shares

February 08, 2022 10:18 AM PST | By Rupam Roy

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BP plc (BP) profit at 10-year high, buys back US$6 billion shares — Image source: Krunja,shutterstock

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Highlights

BP plc plans to buy back US$1.5 billion shares ahead of its first-quarter results.

The company's total revenue and other income were US$52.23 billion in Q4, FY21.

Its adjusted income of US$4.06 billion was the highest profit in any quarter since 2012.

Global oil and gas major BP plc. (BP) reported a robust fourth-quarter profit of US$4.06 billion, the highest in any quarter since 2012, before the opening bell on Tuesday.

The London-based company also announced to buy back US$1.5 billion shares after the results.

The company operates in Europe, Asia, the Americas, and Africa.

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In the latest quarter, several oil majors like Exxon Mobil, Chevron, and Shell Plc. registered strong profit, enabling them to return investors’ money after years of generating small returns.

BP plc plans to buy back US$1.5 billion worth of shares with its excess cash flow from the previous year before its first-quarter results later in the year.

The company had been repurchasing about US$4 billion shares annually. CEO Bernard Looney told Bloomberg TV that the repurchase opportunities would increase if the oil prices go up.

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According to the earnings statement, the company repurchased around US$6 billion shares in 2021, topping previous estimates of US$5 billion but fell short of an aggressive increase as in the case of Shell plc, which announced to buy back US$8.5 billion shares in the first half of 2022.

BP shares traded at US$33.39 at 8:23 am ET on February 8, up 0.15% from its previous close. The stock rose 51.34% over the past 12 months.

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BP's fourth-quarter earnings

The total revenue and other income came in at US$52.23 billion in Q4, FY21, compared to US$30.18 billion in the year-ago quarter.

Its net profit was US$2.57 billion, against US$1.48 billion in Q4, FY20. For fiscal 2021, it reported a net profit of US$8.48 billion on revenue of US$164.19 billion.

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The adjusted net income was US$4.06 billion against US$115 million in the comparable quarter of the previous year, the biggest jump in any quarter since 2012.

Its operating cash flow was US$6.11 billion compared to US$2.26 billion in Q4, FY20.

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Bottomline

BP’s strong earnings show a remarkable comeback from the pandemic disruptions. It also repaid over US$8 billion net debt last year while increasing its dividend. It also plans to moderately increase investments compared with its historically low levels of investment.

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