BP stock pops on strong Q4 figures and accelerated stock buybacks
Shares of BP (NYSE:) rose 5.7% in London after the oil and gas giant reported better-than-expected Q4 profit and accelerated share repurchases.
For the fourth quarter, the company posted adjusted earnings per share (EPS) of 17.77c, down from 26.44c last year and versus the 16.27c consensus projection.
Adjusted net income of $2.99 billion, down 38% year-over-year (YoY), and ahead of the consensus estimates of $2.76 billion.
For the full year, BP reported an underlying replacement cost profit, which serves as an alternative measure for net profit, of $13.8 billion. This figure represents a significant decrease from the historic high of $27.7 billion reported in the prior year. Analysts had projected a net profit of $13.9 billion.
Adjusted EBIT stood at $6.13 billion, down 34% YoY, though still above the estimated $5.87 billion.
BP posted adjusted oil production and operations PBIT of $3.55 billion, down 20% from a year earlier, and compared to $3.35 billion projected by Wall Street. Adjusted gas and low carbon energy PBIT was reported at $1.78 billion, down 44% YoY, and short of the $2 billion consensus.
The energy company reported capital expenditure (capex) of $4.25 billion in Q4, up 15% from the same period last year, and more than the $4.12 billion estimated by analysts. Organic capex rose 21% YoY to $4.67 billion.
Operating cash flow fell 31% YoY to $9.38 billion, while analysts were looking for $8.24 billion. Net debt dropped 6.3% quarter-on-quarter to $20.91 billion, compared to analysts’ estimates of $20.52 billion.
Looking ahead, BP expects a total capex of about $16 billion in this fiscal year.
Also, BP declared a dividend of 7.27 cents per ordinary share for the last quarter of 2023, representing a 10% rise from the year-ago period.
“Looking back, 2023 was a year of strong operational performance with real momentum in delivery right across the business,” BP CEO Murray Auchincloss said in a statement.
“We are confident in our strategy, on delivering as a simpler, more focused and higher-value company, and committed to growing long-term value for our shareholders.”
Furthermore, the energy conglomerate has accelerated its share buyback program, revealing plans to repurchase $1.75 billion worth of shares before releasing its first-quarter earnings.
The company pledged to complete a share buyback totaling $3.5 billion for the first six months of the year.
“BP delivers what investors were asking for: higher distributions and more visibility,” Jefferies analysts said in a note.
“The outlook for a $1.75bn quarterly buyback through 2025 should be well-received and the tighter capex guidance at $16bn reduces concerns for M&A driving investments to the upper end of the $14-18bn range.”
