biedexmarkets.com — London-listed shares in BP (LON:) were choppy on Tuesday after the energy giant posted lower than anticipated underlying profit in the first quarter due to a slide in oil and gas prices.
Underlying replacement cost profit — a gauge of net income — dropped to $2.72 billion, down from $4.96 billion in the corresponding three-month period last year. Company-compiled forecasts had been anticipating a mark of $2.87 billion.
Replacement cost prior to interest and tax, another metric closely followed by analysts, dipped to $4.82 billion from $13.23 billion in a year ago.
BP noted that the results were also dented by an outage at its key Whiting refinery in Indiana and “signficantly weaker” fuels margin, which both offset a “strong” oil trading performance and higher realized refining margins.
In a statement, Chief Executive Murray Auchincloss said that the group is targeting at least $2 billion in cash cost savings by the end of 2026 partly through supply chain efficiencies and a “digital transformation.” Auchincloss, who is leading BP after the sudden departure of former boss Bernard Looney last year, has promised to simplify the firm’s cost structure and streamline its executive leadership.
Meanwhile, BP backed its plan to deliver a $1.75 billion share buyback for the first quarter, saying it is looking to offer “competitive” distributions to stakeholders. It declared a dividend payout of 7.27 cents as well.
