1 August 2023
If you are covering BP’s latest financial results, please find below a comment from Jamie Maddock, equity research analyst at Quilter Cheviot:
"BP's latest earnings report has not met the expectations set by analysts, with results that fell significantly short of the consensus prediction. This was largely due to the disappointing performance of its Customers and Products division, which includes refining. The company reported earnings of $2.6 billion, representing a substantial decline of around 70% year-on-year. This considerable slump is largely attributed to lower refined product prices and a weak contribution from oil trading.
"However, it wasn't all bad news for investors. Despite the underwhelming earnings, BP's approach to shareholder distributions came as a pleasant surprise. The company maintained its share buyback program at $1.5 billion for the third quarter, which was at the upper limit of what analysts were expecting. Moreover, the company raised its dividend by 10% to 7.27 cents per share, which is a meaningful upward adjustment that few predicted. This strategy indicates a robust commitment to returning capital to shareholders, even in the face of disappointing earnings.
"In terms of future outlook, BP projects its expenditure to remain steady. While the results of this latest report have been less than stellar, the commitment to shareholders and maintained spending could suggest an anticipation of more favourable market conditions in the future. Therefore, while this quarter's results may give cause for concern, it seems that BP is maintaining a cautiously optimistic outlook for the future."
