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BP Beats Q1 Earnings Estimates, Announces Share Buyback

·5 min read

BP plc BP has reported first-quarter 2022 adjusted earnings of $1.92 per American Depositary Share (“ADS”) on a replacement-cost basis, excluding non-operating items. The bottom line beat the Zacks Consensus Estimate of earnings of $1.41 per share and also rose from 78 cents reported a year ago.

Total quarterly revenues of $51,220 million missed the Zacks Consensus Estimate of $53,134 million. However, the top line increased from $36,492 million in the year-ago quarter.

The strong quarterly earnings were driven by higher realizations of commodity prices.

BP p.l.c. Price, Consensus and EPS Surprise

BP p.l.c. Price, Consensus and EPS Surprise
BP p.l.c. Price, Consensus and EPS Surprise

BP p.l.c. price-consensus-eps-surprise-chart | BP p.l.c. Quote

Share Repurchases

BP announced plans to execute a $2.5-billion share buyback, which is expected to complete before reporting the second-quarter results. The company anticipates buying back $1 billion worth of shares every quarter, considering Brent crude price at $60 per barrel.

Operational Performance

Oil Production & Operations:

In the first quarter, BP has reported total production of 1,286 thousand barrels of oil equivalent per day (MBoe/d), down from 1,309 MBoe/d in the year-ago quarter.

BP sold liquids at $83.47 a barrel in the first quarter compared with $52.92 in the prior-year period. It sold natural gas at $9.40 per thousand cubic feet compared with $4.11 in the year-ago quarter. Overall price realization rose to $76.64 per Boe from the year-ago level of $46.81.

After adjusting for non-operating items, underlying replacement cost earnings before interest and tax for the segment amounted to $4,683 million. The figure jumped from earnings of $1,565 million in the year-ago quarter. Higher commodity price realizations primarily caused the upside.

Gas & Low Carbon Energy:

Segmental profits totaled $3,595 million, improving from earnings of $2,270 million in the year-ago quarter, primarily led by increased oil equivalent production and prices.

In the first quarter, the total production of 966 thousand barrels of MBoe/d improved from 909 MBoe/d in the year-ago quarter. Key project start-ups primarily contributed to the production.

Customers & Products:

After adjusting for non-operating items, underlying replacement cost earnings before interest and tax for the segment amounted to $2,156 million, up significantly from $656 million in the year-ago quarter. A favorable refining business aided the segment.

BP-operated refining availability for the March-end quarter was 95%, reflecting an increase from 94.8% in the year-ago quarter. Total refinery throughputs from the first quarter were reported at 1,650 thousand barrels per day (MBbl/D), improving from 1,601 MBbl/D in the prior-year quarter.

Capex

Organic capital expenditure for the reported quarter was $2,573 million. The company has reported total capital spending for the quarter at $2,929 million.

Financials

BP's net debt, including leases, was $36,129 million at the end of the first quarter versus $42,380 million in the prior-year quarter. Gearing was recorded at 31.5% compared with 31.9% in the prior-year quarter.

Outlook

For 2022, BP reiterated its capital expenditure guidance of $14-15 billion. It expects the same to be $14-16 billion per annum through 2025.

BP expects the upstream production to remain flat year over year in 2022. For the second quarter of the year, the company projects a sequential decline in upstream production due to a base decline and higher maintenance.

The company expects to receive $2-3 billion of divestment and other proceeds this year.

Zacks Rank

BP currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

A Glimpse of Q1 Results of Other Integrated Energy Companies

Chevron Corporation CVX reported adjusted first-quarter earnings per share of $3.36, missing the Zacks Consensus Estimate of $3.44 on a weaker-than-expected performance from the downstream segment.

As of Mar 31, Chevron had $11.7 billion in cash and cash equivalents and total debt of $29.3 billion, with a debt-to-total capitalization of 16.7%. CVX paid out $2.7 billion in dividends and bought back $1.3 billion worth of its shares.

Hess Corporation HES reported first-quarter 2022 earnings per share of $1.30, beating the Zacks Consensus Estimate of $1.12. The higher commodity price realizations backed the strong quarterly results.

As of Mar 31, 2022, Hess Corporation had $1,370 million in cash and cash equivalents. HES’ long-term debt was $7,934 million at the first-quarter end. The current maturity of the long-term debt is $22 million.

Cenovus Energy Inc. CVE reported first-quarter 2022 earnings per share of 62 cents, missing the Zacks Consensus Estimate of earnings of 83 cents. Lower-than-expected earnings can be attributed to increased transportation and blending costs, as well as expenses for purchased products.

As of Mar 31, 2022, Cenovus had cash and cash equivalents of C$3,399 million. Total long-term debt was C$11,744 million. CVE increased the quarterly base dividend to 10.5 Canadian cents per share, suggesting a 200% increase from 3.5 Canadian cents per share.


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