Trimmed earnings

Lower oil prices see fall in BP’s first quarter profit

petrol prices
Falling oil prices have hit profits at BP (pic: Terry Murden)

BP has posted a 40% fall in first-quarter earnings to $2.7 billion as a result of lower oil and gas prices and a US refinery outage.

The underlying replacement cost profit, the company’s preferred measure, missed forecasts of $2.87bn. The company reported a $3 billion profit in the previous quarter and $5bn a year earlier as energy prices soared.

It held its dividend at 7.27 cents per share and maintained the current rate of its share buyback programme at $1.75bn over the next three months.

The company said it expects second quarter 2024 reported upstream production to be slightly lower compared with first-quarter 2024.

Murray Auchincloss, chief executive, said: “We’ve delivered another resilient quarter financially and continued to make progress on our strategy. Oil production was up and our ACE platform in the Caspian is now producing.

“We are simplifying and reducing complexity across bp and plan to deliver at least $2 billion of cash cost savings by the end of 2026 through high grading our portfolio, digital transformation, supply chain efficiencies and global capability hubs.”

Market reaction

Stuart Lamont, investment manager at RBC Brewin Dolphin, said: “As with Shell last week, investors were looking for reassurance from BP on production volumes and capital discipline.

“However, BP has missed profit expectations on the back of lower gas prices, weaker margins, and operational outages.

“The extension to the share buyback programme and maintained dividend will, nevertheless, provide shareholders with some solace, both of which suggest BP’s management team sees this as a temporary setback and remains relatively optimistic about the near-term outlook.”

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