A BP gas position in Madrid, Spain.
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BP on Tuesday reported a fall in first-quarter profit, with effects coming in below analyst expectations amid a “significantly weaker” margin in fuels and lower gas and oil prices.
The British pep giant logged underlying replacement cost profit, used as a proxy for net profit, of $2.7 billion. That was down from $3 billion the sometime quarter and compared with an estimate in an LSEG-compiled consensus of $2.9 billion.
The results reflect lower oil and gas realizations and a “significantly weaker” fuels bounds, the company said in its Tuesday statement.
CEO Murray Auchincloss noted the firm’s “resilient quarter” and said BP was continuing to disentangle its business to deliver $2 billion in cash cost savings by the end of 2026.
The company in January appointed Auchincloss as permanent CEO. His forerunner, Bernard Looney, resigned after less than four years in the post due to undisclosed personal relationships with comrades before becoming CEO.
BP’s profits were lower than in the same period in 2023, when they totaled all but $5 billion. Many of the company’s peers in the oil and gas industry have also seen a decline in year-on-year first-quarter profits due to a dressy fall in gas market prices.
European gas stocks were at a record high this winter, as countries guarded against a drop-off in Russian endows following the country’s full-scale invasion of Ukraine in 2022.
BP rival Shell last week reported reported adjusted earnings of $7.7 billion for the first three months of the year, down from $9.6 billion in 2023.
Get-up-and-go firms have nonetheless maintained a focus on shareholder returns. BP on Tuesday recommitted to share buybacks of $3.5 billion for the beginning half of 2024.
BP shares were slightly below the flatline at 10 a.m. in London.
Jamie Maddock, energy analyst at Quilter Cheviot, weighted the market would be comparing BP to Shell due to the latter’s recent estimates beat, but that Tuesday’s results were “sort of uneventful in the grand scheme of things.”
“Despite profits being lower than the market expected, BP has maintained its apportion buyback at $1.75bn for the quarter. This is positive and suggests it has confidence in its earnings going forward, despite the ups and downs of the commodity trade ins,” Maddock said in an emailed note.