BP Q3 Earnings Report

BP (NYSE:BP) reported a 30% drop in Q3 profit to $2.3 billion, marking the lowest result in nearly four years. Softer refining margins and oil trading results continue to impact the company's performance.

For the three-month period, BP’s underlying replacement cost profit, its preferred net income measure, was $2.27 billion, surpassing analysts’ forecasts of $2.05 billion from a company survey, although it decreased from $2.8 billion in the previous quarter and $3.3 billion a year ago.

This marks BP’s weakest results since Q4 2020 when profits took a hit due to pandemic-related disruptions.

BP’s US-listed shares fell around 1% in premarket trading on Tuesday.

In terms of production, BP’s oil and gas output increased by 3% year-over-year to 2.38 million barrels of oil equivalent per day, helping offset weaker refining margins and less robust trading results. Higher natural gas prices positively affected earnings; however, gas trading was average throughout the quarter.

Net debt climbed to $24.3 billion from $22.6 billion at the end of June, primarily due to BP acquiring the remaining 50% stake in its solar venture Lightsource BP. Consequently, BP’s gearing ratio (debt-to-market capitalization) rose to 23.3% from 20.3% a year ago.

Barclays analysts commented that BP’s above-consensus Q3 net income is “welcome with upstream and customer business performing well and an unexpected gain in the corporate line.” However, they noted that the products business performance was disappointing and debt increased this quarter.

BP maintained its dividend at 8 cents per share, following an increase last quarter, and kept its share buyback rate steady at $1.75 billion over the next three months.