BP Q1 earnings report: ‘the business is performing well’

Image for BP plc Q1 results

Shares of BP plc (LON: BP) opened 5.0% up on Tuesday after the oil giant said higher commodity prices and strength in oil and gas trading helped boost its Q1 profit to highest in more than a decade.

What BP Q1 earnings report tells us

  • Underlying replacement cost profit at $6.25 billion topped consensus by 39%.
  • Quitting a 19.75% stake in Rosneft (Russia) resulted in $25.5 billion impairments.
  • Swung to $20.4 billion of net loss in Q1, as per the earnings press release.
  • Authorized $2.50 billion in stock repurchase and 5.46 pence of per-share dividend.
  • Operating cash flow stood at $8.20 billion in the recent fiscal quarter.
  • Net debt went down for the eighth consecutive quarter to $27.5 billion.

BP forecasts upstream production this year to remain roughly unchanged versus 2021 despite the impact of the ongoing Ukraine war. Refining margins are expected to remain elevated in Q2.

Highlights from CEO Looney’s interview on CNBC

The stock is now up more than 10% for the year. Discussing results on CNBC’s “Squawk Box”, CEO Bernard Looney said:

The business is performing well, operations are strong, trading had a very good quarter and our convenience business had its best Q1 in our history. The rest of the year depends on the outlook for the environment but right now it’s running very well.

He agreed the energy space was seeing unprecedented levels of volatility at present. Other than returning capital to the shareholders and paying taxes, BP is committed to investing funds back into the business, the chief executive added.

Oil and gas is crucial to the energy system of today. We need to make sure there’s sufficient investment into that. At the same time, we’re investing in accelerating energy transition. 40% of our capital in a few years will go into non-hydrocarbons, that’s up from 3.0% in 2019.

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Source: https://invezz.com/news/2022/05/03/bp-q1-earnings-report-the-business-is-performing-well/